Canadian Packaging

Reynolds Group to acquire Graham Packaging

The $4.5 billion merger means previous agreement of Silgan to purchase Graham is off.


June 17, 2011
by Canadian Packaging Staff

If sometimes it seems the world is turning upside down—it is, as the Auckland, New Zealand-based Reynolds Group Holdings Limited makes another massive business purchase.

Graham Packaging Company Inc.—a York, PA-based leading global supplier of value-added rigid plastic containers for the food, specialty beverage and consumer products markets—has announced the signing of a definitive merger agreement where it will be acquired by the Reynolds in an all-cash transaction for $25.50 per share, or a total of approximately $4.5 billion including assumed indebtedness.

The deal is expected to close in the second half of this year. Reynolds intends to finance the payment of the purchase price through fully committed financing and cash on hand at Reynolds.

Graham Packaging also announced it has terminated the previously announced merger agreement with Silgan Holdings Inc. Originally announced two months ago, the Stamford, CT-based Silgan—a leading supplier of rigid consumer goods packaging products—was to have acquired Graham Packaging in a deal worth $4.1 billion. That deal is now dead.

Graham Packaging’s Board of Directors has determined that the transaction with Reynolds constitutes a superior proposal as compared to the transaction with Silgan even after taking into account certain adjustments to the terms thereof proposed by Silgan during the match-right period.

As a consequence of this determination, Graham Packaging’s Board of Directors has withdrawn its recommendation with respect to the merger agreement with Silgan. Graham Packaging is paying Silgan a $39.5 million termination fee in accordance with the terms of that agreement.

About Graham Packaging

Graham Packaging is a leading U.S. supplier of plastic containers for hot-fill juice and juice drinks, sports drinks, drinkable yogurt and smoothies, nutritional supplements, wide-mouth food, dressings, condiments and beers; the leading global supplier of plastic containers for yogurt drinks; a leading supplier of plastic containers for liquid fabric care products, dish care products and hard-surface cleaners; and the leading supplier in the U.S., Canada and Brazil of one-quart/liter plastic motor oil containers. Graham Packaging proforma net sales (after taking into account the acquisition of Liquid Container in September 2010), approximates $2.8 billion. The company employs over 8,300 associates in 15 countries through 97 manufacturing facilities.

More information on Graham Packaging may be found at: www.grahampackaging.com.