Berry Plastics Group has signed an agreement to acquire AEP Industries, a North American manufacturer of flexible plastic packaging films, for $765m including debt.
Under the terms of the deal, each shareholder of AEP will receive either $110 in cash or 2.5011 shares of Berry common stock for each share held.
New Jersey-based AEP manufactures a range of flexible plastic packaging products for consumer, industrial, and agricultural applications.
The company employs 2,600 people and operates 14 manufacturing facilities in the US and Canada.
Berry Plastics chairman and CEO Jon Rich said: “AEP, together with Berry’s Engineered Materials Division, creates an impressive packaging film producer serving the North American market.
“This unique combination offers the opportunity for significant value creation for Berry and AEP shareholders alike, as we realize procurement and operating cost savings across the two organizations.”
With the acquisition of AEP, Berry Plastics estimates to achieve cost synergies of around $50m a year.
AEP chairman and CEO Brendan Barba said: “We believe Berry is the right partner to expand our product portfolio to deliver high quality packaging films to even more customers around the world.”
Berry Plastics expects the acquisition to optimize complementary production capacities, reduce material and conversion costs, and better serve customers from an expanded North American footprint.
Planned to be completed in the December 2016 quarter, the deal is subject to the approval of AEP shareholders and customary closing conditions, including applicable regulatory approvals.
In 2015, Berry Plastics Group acquired specialty materials firm Avintiv (formerly PGI Specialty Materials) from private equity funds managed by Blackstone Group, for $2.45bn.