A potential takeover of Bemis Co. Inc. by Amcor Ltd. makes sense in the eyes of one observer of the two plastics packaging companies.
A news report indicates Melbourne, Australia-based Amcor is eyeing Bemis as a potential acquisition target, a move that stock analyst Christopher Manuel of Wells Fargo Securities LLC said he can understand.
Amcor has made several acquisitions around the world in recent years, and Bemis has been disappointed with recent financial results. It has been working to make improvements by closing locations, cutting jobs and is looking to broaden its customer base.
Bloomberg reported the potential acquisition 7 Sept, and Manuel provided some perspective.
"At this point, the concept is merely conjecture [no comment from management]; however we see several merits behind how such a transaction could make sense," he wrote in a research note. That includes Amcor's continued investment globally in flexible packaging and the company's desire to grow "inorganically, including a bigger presence in the US."
Flexible packaging is Amcor's largest product segment.
Total company sales for the year ended 30 June totalled $9.1bn (€7.58bn), including about $6.2bn (€5.1bn) for flexible packaging, Manuel reported.
It was just last year that Amcor purchased Alusa, South America's largest flexible packaging business, for $435m (€362m). That move brought four plants to the company.
Amcor also bought Deluxe Packages of Yuba, City, California, at the beginning of 2016, a $45m (€37.4m) move that gave the company a West Coast presence in flexible packaging.
"North America is an attractive region for flexible packaging and this acquisition represents an excellent opportunity to accelerate profitable growth," Amcor CEO Ron Delia said in a statement at that time.
The company also has made a series of acquisitions through its Amcor Rigid Plastics division, based in Ann Arbor, Michigan, in recent years.
Bemis has sales of about $4bn annually, including about two-thirds of that total coming from the United States.
Neenah, Wis.-based Bemis makes both flexible and semi-rigid plastic packaging and has about 17,500 employees. An investor presentation posted on the company's website earlier this year indicates the company has 59 facilities in 12 countries.