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Novolex to Acquire Pactiv Evergreen in Landmark $6.7 Billion Deal
December 09, 2024
In a transformative move for the North American packaging sector, Novolex has announced plans to acquire Pactiv Evergreen in an all-cash transaction valued at $6.7 billion. The deal, set to close in mid-2025, will see Pactiv Evergreen transition from a publicly traded company to a private entity, with its shares delisted from the Nasdaq. The acquisition has already received approval from Pactiv Evergreen's board of directors and majority shareholder, leaving regulatory reviews as the final hurdle.
The Novolex-Pactiv Evergreen deal is the latest in a string of high-profile mergers reshaping the packaging industry. Recent transactions, such as Amcor's acquisition of Berry Global and Aurora with Plastique, underscore a growing trend of consolidation aimed at streamlining operations, expanding product offerings, and addressing rising demand for sustainable packaging solutions. These strategic moves highlight the sector's push toward greater efficiency and innovation, positioning industry leaders to capitalize on shifting market dynamics and consumer preferences.
The merger unites two industry leaders, creating a powerhouse with a diverse product portfolio and a significant presence across the United States, Canada, and Mexico. Together, the companies will operate more than 250 brands, offering an unmatched range of packaging solutions.
"This transaction aligns with our long-term vision to build the most innovative, sustainable, and customer-focused company in the industry," said Stan Bikulege, Novolex's CEO, who will continue to lead the expanded organization.
Pactiv Evergreen CEO Mike King's future role remains uncertain, though a securities filing revealed that King and other top executives, including CFO Jonathan Baksht, will receive accelerated compensation payments as part of the deal.
Pactiv Evergreen's sale comes on the heels of significant operational shifts. In October, the company divested two paper mills in Arkansas and North Carolina, signaling a pivot away from mill operations to focus on core converting operations in North America.
During its recent earnings calls, Pactiv Evergreen outlined cost-cutting measures, including $15 million in spending reductions and staff optimization, as it grappled with weaker demand and operational challenges. These moves were part of a broader transformation strategy aimed at enhancing profitability and streamlining its footprint, which comprises approximately 100 facilities.
"This agreement follows a comprehensive evaluation of opportunities and reflects the progress we've made in optimizing our operations and driving value for shareholders," King said in a statement.
For Novolex, the acquisition is a continuation of its growth trajectory under the stewardship of Apollo Funds, which acquired a majority stake in 2022. Affiliates of Apollo and the Canada Pension Plan Investment Board are contributing approximately $1 billion to finance the Pactiv Evergreen purchase, securing a significant minority stake in the company.
Earlier this year, Novolex also expanded its portfolio by acquiring American Twisting, a paper bag handle manufacturer, reinforcing its position as a leader in the packaging sector.
The consolidation is expected to reshape the packaging landscape, leveraging complementary capabilities to meet growing demand for innovative and sustainable solutions. As regulatory reviews progress, all eyes are on 2025, when the deal is anticipated to close and mark a new chapter for both companies.
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