RPC Group accepts higher buyout offer from plastic packaging firm Berry Global

UK – RPC Group, one of the largest plastic packaging suppliers in the UK has recommended the buyout offer from Berry Global, which is higher than that made by Apollo in January.

According to a report by Reuters, RPC has agreed to a purchase agreement worth US$4.37 billion compared to about US$4.2 billion tabled by private equity firm Apollo Global Management.

The report indicates that RPC, the largest packaging group in Europe had decided to ditch the previous bid with Apollo in favor of Berry Global’s which values RPC at US$10.30 per share, higher than the US$10.16 per share that of Apollo’s offering.

RPC had earlier noted that its debt burden was constraining its activities and the ability to pursue growth opportunities.

The divestment could just be one way by the company to improve value returned to investors and put the business on a profitable path.

For Evansville, Indiana headquartered Berry Global, the deal expands its product portfolio including a wide variety of plastic food-packaging products

It has over 131 facilities across the globe and more than 23,000 employees with core operations including hygiene, health and specialties materials, consumer packaging and engineered materials.

In addition to films and sheeting, it also produces an extensive line in tapes and adhesives.

Berry Global was in January reported to be considering an offer for RPC Group after Apollo sealed a deal with the company.

The combined businesses will form one of the largest entities in the packaging sector, bringing in synergies and expertise in packaging for the food, beverage and related industries.

The deal is one of the largest in the packaging sector after packaging company Amcor agreed to acquire Bemis, a US-based manufacturer of flexible and rigid plastic packaging, for US$6.8 billion last year.

Despite the passionate concerns raised about plastic industry, packaging firms are betting big in investments with an eye on stable cashflow and demand from the food and beverage sectors.

Packaging group DS Smith Plc has agreed to sell its plastics division to private equity firm Olympus Partners to focus on fiber and corrugated products.

South Africa’s Master Plastics in December agreed to a buyout offer from private equity firms to pursue growth and enhance diversification.