The US-based company produces rigid consumer goods and closures across the food and personal care sectors, as well as container sleeves. Graham Packaging, with a wider product reach, manufactures plastic containers for the food, beverage, personal care industries, as well as the automotive and chemical sectors.
Silgan said the deal, expected to close in the third quarter of this year, will see it grow into a leading player on the world’s packaging stage with total annual sales of over $6.2 billion and over 17,000 employees operating in 180 manufacturing facilities in 19 countries.
The firm said it expected the acquisition to be accretive to earnings within the first year. Synergies from the takeover would net Silgan $50m by the third year due mainly to “reductions in administrative expenses, procurement savings and a more efficient manufacturing cost structure”, it added.
“This acquisition creates the premier Food and Specialty Beverage packaging company, allowing Silgan to significantly broaden its ability to serve these important markets with multiple rigid packaging options," said Tony Allott, Silgan's president and CEO. "Graham Packaging is a differentiated plastic packaging franchise with deep customer relationships and a strong track record for innovation. In combination, we anticipate building enhanced relationships with global customers in our target end markets."
The move has been approved by both boards and awaits only shareholder approval before being implemented.