425: Berry Global Announces Leadership Structure for NewCo Following Glatfelter Acquisition

Berry Global unveils the organizational structure and leadership team for NewCo, the entity formed after the acquisition of Glatfelter, focusing on a regional operating model.

Summary

• Berry Global has announced the intended organizational structure and leadership appointments for NewCo, the entity resulting from the acquisition of Glatfelter.
• NewCo will operate under a regional model, dividing operations into two primary regions: the Americas, and Europe, Middle East, Asia & rest of world (EMEIA).
• This regional structure aims to expedite decision-making at the local level.
• Glatfelter's Composite Fibers business and specialty businesses from both Berry and Glatfelter will be integrated into these regions.
• The leadership team includes appointments from both Glatfelter and Berry, with Jim Till as CFO & Treasurer, Tarun Manroa as Chief Operating Officer, Phil Lerro as Chief Information Officer, Achim Schalk as President EMEIA & Asia, and David Parks as President Americas.
• Patricia Sargeant will lead North American Sales, Eileen Beck will lead Global Human Resources, and Kathy Vanderheyden will lead Business Excellence & Integration, Quality, Regulatory and EHS.
• Paul Harmon will lead Global Innovation, Sustainability, Corporate Branding and Marketing, while Robert Weilminster will lead Corporate Development, Strategy, Investor Relations and Integration.
• Several Glatfelter senior leaders, including Boris Illetschko, Will Wiley, and Vishal Bansal, will depart after the closing of the NewCo transaction.
• The new company name, logo, and brand will be announced over the summer months.

Sentiment

Score: 7

Explanation: The document conveys a positive outlook regarding the integration and future success of NewCo, but also acknowledges potential risks and challenges associated with the transaction. The sentiment is moderately positive.

Positives

• The regional operating model is expected to improve decision-making speed and responsiveness to market changes.
• Integration of Glatfelter's Composite Fibers business into the regional structure reinforces the importance of these markets.
• The leadership team includes experienced individuals from both Glatfelter and Berry.
• Employees with global responsibilities will continue to operate within their normal duties.

Negatives

• Several key Glatfelter senior leaders will be leaving the company after the transaction closes, potentially causing disruption.
• The shift to a regional structure may require adjustments for Glatfelter employees accustomed to a global functional model.

Risks

• The integration of the two companies may be more difficult, time-consuming, or costly than expected.
• The announcement, pendency, or completion of the transaction could affect the ability to retain customers and key personnel.
• Regulatory approvals may be delayed or obtained subject to unanticipated conditions.
• Potential litigation could arise in connection with the proposed transaction.

Future Outlook

The document anticipates the announcement of the new company name, logo, and brand over the summer months and emphasizes the importance of delivering on 2024 commitments to position the new company for success.

Management Comments

• 'Over the last few months, I have met with the Board of Directors of Glatfelter and Berry, as well as senior leaders from both organizations to align and create the best operating model for NewCo to ensure we are ready on day one to meet and exceed our business objectives and stakeholder expectations,' said Curt Begle.
• Curt Begle stated that the regional structure is a 'proven approach' and he is 'confident it will support a winning operating model'.
• Thomas and I are grateful for their continued support and efforts in running the day-to-day business and thank them for leading their teams through the many important integration initiatives required to successfully launch NewCo.

Industry Context

This announcement reflects a trend in the industry towards consolidation and the creation of larger, more geographically diverse entities. The regional operating model is a common approach for large multinational corporations to manage diverse markets and improve responsiveness.

Comparison to Industry Standards

• Berry Global's move to a regional operating model mirrors strategies employed by other large packaging and specialty materials companies like Amcor and Sonoco, which operate with regional divisions to cater to local market needs.
• The integration of acquired businesses into existing regional structures is a common practice, similar to how International Paper integrates acquired paper and packaging assets into its North American and European operations.
• The appointment of leaders from both acquiring and acquired companies is a typical approach to ensure continuity and leverage expertise, as seen in other mergers and acquisitions in the sector.

Management Changes

Stakeholder Impact

• Shareholders of both Berry and Glatfelter are impacted by the proposed transaction and its potential benefits and risks.
• Employees of both companies are affected by the organizational changes and leadership appointments.
• Customers may experience changes in product offerings and service delivery as a result of the integration.
• Suppliers and creditors may be impacted by the combined company's financial performance and strategic direction.

Next Steps

• Assembling the organizations under the newly appointed leaders.
• Sharing further details as they emerge.
• Announcing the new company name, logo, and brand over the summer months.

Key Dates