CLEVELAND, March 8, 2019 /PRNewswire/ — On March 8, 2019, Berry Global, a leading packaging manufacturer, announced that it has agreed to acquire RPC Group, Europe’s largest plastic packaging supplier, in a deal valued at $4.37 billion.
If the deal goes through as planned, the combined firm will trail only the soon-to-be combined Amcor/Bemis (that transaction is due to close in the second quarter of 2019) in global plastic packaging sales.
Freedonia Packaging Industry Analyst Chad Henry notes, „The primary effect will be to expand Berry Global more deeply into markets beyond North America.“ In 2018, nearly all of Berry Global’s packaging sales were in North America. The merger will increase Berry Global’s European share of net sales greatly as total revenue in the EMEAI region will rise from 10% to over 35%.
According to Henry, „In many packaging product areas, the two companies were competitors. However, one area that would mark a significant change for Berry Global is rigid bulk packaging, where RPC Group is currently a top-five supplier of plastic pails of various sizes.“ Freedonia estimates that the US rigid bulk packaging industry generated more than $7 billion in sales in 2018.
Another benefit to Berry Global would be the addition of the rotational molding technology expertise of the RPC Group. The company primarily uses this technology to keep costs low with some plastic parts produced in short runs, due to its low tooling costs.
Additional analysis of opportunities and trends in the rigid bulk packaging industry can be found in Freedonia’s report Rigid Bulk Packaging (to be published March 18). Coverage of this and other areas in plastic packaging can be found on the Freedonia Group Packaging Portal.
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SOURCE The Freedonia Group