Highlights

· Strategic combination to create the global leader in consumer packaging
· Comprehensive global footprint with greater scale in every region
· Industry leading R&D capabilities and better positioned to capture sustainable packaging opportunities
· Stronger value proposition for shareholders, customers, employees and the environment
· Combined revenues of US$13 billion, EBITDA of US$2.2 billion (1), annual cash flow after capital expenditure of more than US$1 billion and an investment grade balance sheet
· All-stock cash free transaction: Amcor shareholders to own 71%; Bemis shareholders to own 29% of combined company
· Double-digit pro-forma EPS (2) accretion for all shareholders including run-rate cost synergies of US$180 million incremental to Bemis’ “Agility” improvement plan
· Amcor to establish primary listing on NYSE with an estimated market capitalization of US$17 billion (3) and to maintain a listing on ASX, with expected index inclusion in both markets

August 6, 2018

MELBOURNE, AUSTRALIA and NEENAH, WISCONSIN – Amcor Limited (ASX: AMC) and Bemis Company, Inc. (NYSE: BMS) today announced that their respective Boards of Directors have unanimously approved a definitive agreement under which Amcor will acquire Bemis in an all-stock combination.

Combining these two complementary companies will create the global leader in consumer packaging, with the footprint, scale and capabilities to drive significant value for shareholders, offer customers and employees the most compelling value proposition in the packaging industry and deliver the most sustainable innovations for the environment.

The transaction will be effected at a fixed exchange ratio of 5.1 Amcor shares for each Bemis share, resulting in Amcor and Bemis shareholders owning approximately 71% and 29% of the combined company, respectively. This is equivalent to a transaction price of US$57.75 per Bemis share based on Amcor’s closing share price of A$15.28(4) on August 3, 2018, and represents a premium of 25% to Bemis’ closing price of US$46.31 per share as of August 2, 2018(5).

Amcor's CEO, Ron Delia, said: "The strategic rationale for this combination and the financial benefits are highly compelling for both Amcor and Bemis shareholders. We are convinced this is the right deal at the right time for both companies, and with the right structure for both sets of shareholders to participate in a unique value creation opportunity. Amcor identified flexible packaging in the Americas as a key growth priority and this transaction delivers a step change in that region.

“There are an increasing number of opportunities arising for a leading packaging company to capitalize on shifting consumer needs, an evolving customer landscape and the need to provide responsible packaging solutions that protect the environment. With this transaction, Amcor will have a stronger value proposition with the scale, breadth and resources to unlock value from these opportunities, for the benefit of our shareholders, customers and employees.

”Amcor’s financial profile will be enhanced, and our existing capital allocation framework, or shareholder value creation model, will be maintained and strengthened with this transaction. The combined company expects to have an investment grade balance sheet that provides immediate capacity for further disciplined investment as well as a compelling, progressive dividend. Amcor will draw on our extensive merger integration experience to deliver the substantial benefits of this combination.”

Bemis’ President and CEO, William F. Austen, said: "The combination of Bemis and Amcor is transformational, bringing together two highly complementary organizations to create a global leader in consumer packaging. We believe this combination, which is an exciting growth story for both companies, will benefit all stakeholders. Our employees will benefit as part of a larger and more global organization focused on a commitment to customer service, integrity and supporting strong teams. In addition, the combination will enable us to offer global, regional and local customers the most compelling value proposition in the industry through a broader product portfolio, increased product differentiation and enhanced operating capabilities, while leveraging Bemis’ extensive U.S. manufacturing base and strengths in material science and innovation. Our shareholders will receive a significant premium in this transaction, reflecting the value we’ve built as an organization, as well as the opportunity to continue to participate in the upside potential of a more diversified combined company with greater scale and resources. We look forward to working together with Amcor to ensure a seamless integration.”

Amcor's CEO, Ron Delia, concluded, “Amcor and Bemis have many things in common starting with proud histories that date back more than 150 years. Both companies are grounded in strong values, a shared commitment to innovation and value-added consumer packaging, and have talented management teams.”

“We have always had a great deal of respect for Bemis and we are thrilled that its team in Wisconsin and around the world will be joining Amcor. Many people at Amcor today have joined us through acquisitions, including many of our leadership team, and we would expect Bemis to be well represented in Amcor at all levels of the organization.”

Strategic Rationale

After completion of the transaction, Amcor will have a stronger and more differentiated value proposition for global, regional and local customers through:

Comprehensive global footprint with more balanced, profitable exposure to emerging markets

  • A global flexible packaging footprint across key geographies; a larger, more balanced and more profitable emerging markets business, with sales of some US$3.5 billion from around 30 emerging markets

Greater scale to better serve customers in every region

  • Increased economies of scale and resources through Amcor’s leading positions in Europe, Asia and Latin America, and Bemis’ leading positions in North America and Brazil

Increased exposure to attractive end markets and product segments

  • An enhanced growth profile from greater global participation in protein and healthcare packaging, leveraging innovative technologies in barrier films and foils

Best-in-class operating and innovation capabilities

  • Greater differentiation to innovate and meet customer demands for new and sustainable products through the deployment of proven, industry-leading commercial, operational and R&D capabilities

A continued strong commitment to environmental sustainability

  • Enhanced capabilities behind Amcor’s pledge to develop all recyclable or reusable packaging products by 2025

Greater depth of management talent

  • A stronger combined team by bringing the significant strengths and quality of the workforce across both companies

Financial Rationale

The combination creates substantial value for shareholders of both companies through:

Compelling transaction metrics:

  • All-stock acquisition at an implied value in line with Amcor’s current trading EV/EBITDA multiple, pre cost synergies
  • Pre-tax annual cost synergies of approximately US$180 million (representing approximately 4% to 5% of Bemis sales) by the end of the third year from procurement, manufacturing and G&A efficiencies(6), incremental to Bemis’ “Agility” improvement plan
  • Double digit proforma EPS(2) accretion for all shareholders inclusive of cost synergies at full run rate(1)
  • Double digit returns in excess of Amcor’s Weighted Average Cost of Capital (WACC)

Stronger financial profile going forward:

  • Higher margins through the delivery of cost synergies
  • Potential to grow at higher rates over the long term through a stronger customer value proposition; and increased exposure to attractive segments, which would be additive to the transaction metrics
  • Annual cash flow, after capital expenditure and before dividends, in excess of US$1 billion
  • Investment grade balance sheet with immediate capacity for further investment

Greater liquidity for investors:

  • Through a primary listing on the New York Stock Exchange (“NYSE”) and a listing on the Australian Securities Exchange ("ASX") via CHESS Depositary Interests (“CDI’s”)
  • Expected inclusion in both the US S&P 500 index as well as in the S&P / ASX 200 index

Cash and tax free:

  • Cash and tax free transaction for shareholders in a share for share exchange.

Transaction Structure

The combination will be effected through a merger of Amcor and Bemis into a newly created holding company (‘New Amcor’) incorporated in Jersey. It is intended that New Amcor will be tax resident in the UK after closing. New Amcor will have a primary listing on the NYSE and a listing on the ASX. Amcor and Bemis shareholders will receive shares in New Amcor in a tax-free exchange. Existing Amcor shareholders will have the option to receive one New Amcor ASX listed CDI or one New Amcor NYSE listed share for each Amcor share held. Bemis shareholders will receive 5.1 New Amcor NYSE shares for each Bemis share held, resulting in Amcor and Bemis shareholders owning approximately 71% and 29% of the combined company, respectively.

This structure has several key benefits, including:

  • Listings on two major global exchanges with primary listing on the NYSE and an ASX listing via CDIs
  • Expected index inclusion in the S&P 500 of the full market capitalization of the combined company (estimated at US$17 billion(3)) and pro-rata inclusion of CDIs in the S&P / ASX 200 index, resulting in greater liquidity and considerably increased index buying
  • Ongoing financial strength and funding flexibility for continued investment.

Financial effects

After completion of the transaction it is expected that key aspects of Amcor’s financial profile will remain largely unchanged, including:

  • A compelling, progressive dividend which will continue to be an important component of annual shareholder returns;
  • Post closing, the first annual dividend paid by New Amcor is expected to be no less than the value of the last annual dividend per share declared by Amcor prior to completion of the transaction, providing significant dividend per share accretion to Bemis shareholders; and
  • An on-going capital allocation philosophy consistent with Amcor’s shareholder value creation framework.

Governance and Community

Upon completion of the transaction, New Amcor’s Board is expected to comprise 11 members, 8 of whom are current Amcor directors, and 3 of whom are current Bemis directors. Amcor’s current Chairman, Graeme Liebelt and current CEO Ron Delia will continue in those roles after the transaction and Mr. Delia will continue to serve as the only Executive Director on the Board. New Amcor will continue to maintain a critical presence in Wisconsin and other key Bemis locations. The combined company also expects to leverage Bemis’ plant network and innovation center while continuing to invest in the U.S. New Amcor will continue to support the communities in which Bemis operates and announced today a contribution of US$35,000 to the Bemis Foundation on behalf of Amcor’s 35,000 employees world-wide.

Conditions to the Transaction and Other Terms

Closing of the transaction is conditional upon the receipt of regulatory approvals, approval by both Amcor and Bemis shareholders, and satisfaction of other customary conditions. Subject to the satisfaction of the conditions to closing, the transaction is targeted to close in the first quarter of calendar year 2019.

Under the terms of the transaction agreement, prior to closing each party will be permitted to continue paying dividends in an amount and on timing consistent with past practice.

The full terms of the transaction, including the closing conditions and other terms described herein, are set out in the transaction agreement, which is lodged in a separate announcement.

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