Reynolds Group to Acquire Graham Packaging for $25 a share
Tuesday, June 14, 2021 9:56 AM

New Zealand- based Reynolds Group Holdings Limited today said that it has negotiated definitive terms and conditions to acquire all of the outstanding shares of Graham Packaging Company Inc. (NYSE: GRM) for $25.00 per share in cash.

Graham said early today that its board of directors has determined that the Reynolds Group proposal is superior to its pending transaction with Silgan Holdings Inc. (Nasdaq: SLGN). Graham has provided Silgan with three business days' written notice prior to Graham’s board of directors changing its recommendation with respect to the pending transaction with Silgan, during which period Silgan has the right to make a responsive offer.

Reynolds Group expects to finance the purchase price and associated transaction costs, with new indebtedness of up to $5 billion and existing cash on hand. The transaction is supported by fully committed financing. Reynolds Group expects to realize strategic benefits and operational cost synergies as a result of the combination. These synergies will be achieved primarily through reductions in administrative expenses, procurement savings and logistics efficiencies.

After the deal is completed, Reynolds Group’s leverage ratio is expected to increase by approximately 0.5 times on adjusted EBITDA.

Shares of Graham Packaging group rose 1.56 percent to $26.03 and shares of Silgan Holdings also gained 0.39 percent to $40.78 on Tuesday.