425: Glatfelter and Berry Global Waive Key Conditions for Merger, Amend Tax Agreement

Glatfelter and Berry Global have waived conditions related to the IRS ruling and tax counsel opinions for their merger, amending their Tax Matters Agreement to reflect these changes.

Summary

• Glatfelter Corporation and Berry Global Group, Inc. have waived conditions to closing their previously announced merger relating to the IRS ruling and tax counsel opinions.
• The companies amended their Tax Matters Agreement to reflect the waivers and clarify liabilities for transaction taxes.
• Glatfelter filed a legal opinion as an exhibit to the current report, superseding a previous opinion.
• Spinco filed an amendment to its Registration Statement on Form 10, including a supplement to reflect the waivers.
• The definitive information statement/prospectus will be distributed to Berry stockholders after the Form 10 becomes effective and the spin-off and transactions are completed.
• Upon closing of the Transactions, Glatfelter will be renamed Magnera Corporation.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive as the companies are moving forward with the merger by waiving certain conditions, indicating confidence. However, there are still inherent risks associated with the transaction.

Positives

• The waiver of conditions suggests increased confidence in the transaction proceeding without the need for an IRS ruling or specific tax counsel opinions.
• Berry believes that, in the event that the Spinco Distribution was determined to be taxable to Berry, the taxable gain recognized by Berry, if any, would be immaterial based on Berrys adjusted tax basis in the HHNF Business.

Negatives

• The waiver of the IRS ruling condition introduces some uncertainty regarding the tax treatment of the transaction, although Berry believes any taxable gain would be immaterial.

Risks

• The transaction is subject to various risks, including the possibility of termination, failure to obtain necessary approvals, potential litigation, and difficulties in integrating the combined company.
• Unexpected costs, charges, or expenses could arise from the proposed transaction.
• The companies' ability to retain customers and key personnel could be affected by the announcement, pendency, or completion of the proposed transaction.
• The risk that the Glatfelter shareholders may not approve the transaction proposals.

Future Outlook

The document contains forward-looking statements regarding the expected timing, completion, and effects of the proposed transaction between Berry and Glatfelter, including the ability of the parties to complete the transaction and the anticipated benefits.

Industry Context

The merger between Glatfelter and Berry Global's HHNF business reflects a trend of consolidation and strategic realignment within the nonwovens and hygiene films industry, as companies seek to enhance their market position and expand their product offerings.

Stakeholder Impact

• Shareholders of Glatfelter will vote on the proposed transaction.
• Berry stockholders will receive shares of Magnera common stock.
• Employees of both companies may be affected by the integration of the businesses.
• Customers and suppliers could experience changes as a result of the merger.

Next Steps

• Distribution of the definitive information statement/prospectus to Berry stockholders.
• Completion of the spin-off and the Transactions.
• Glatfelter will be renamed Magnera Corporation upon closing of the Transactions.

Key Dates