Berry, Glatfelter to Create Global Specialty Materials Leader

2023 was a rocky year for packaging giant Berry Global. In February, the Evansville, IN, company’s CEO of 11 years, Tom Salmon, announced his retirement. In May, the company announced 15 plant closures. In August, it announced further plant closures shortly before the company introduced a new CEO, Kevin Kwilinski.

In September came the news that Berry Global would review “strategic alternatives” for its health and hygiene business.

On February 7 that strategic alternative was made clear when Berry Global Group, Inc. and Glatfelter Corp. based in Charlotte, NC, announced entering into a definitive agreement. Berry will spin-off and merge most of its Health, Hygiene and Specialties (HH&S) segment to include its Global Nonwovens and Films business (HHNF) with Glatfelter. This will create a publicly traded company in the growing specialty materials industry. The Boards of Directors of Berry and Glatfelter have unanimously approved the transaction.

Yet to be named, the newly combined company is positioned to serve the world’s largest brand owners across global end markets with favorable long-term growth dynamics. HHNF brings an extensive portfolio of proprietary technologies, with a strong focus on healthcare, hygiene, and specialty end markets, while Glatfelter provides a broad range of innovation capabilities and sustainability solutions.

The new company is valued at $3.6 billion. The expected completion timeframe for the transaction is the second half of 2024.

This combination will offer a highly complementary product suite, including both polymer-based and fiber-based solutions, supported by strong innovation capabilities, with significant geographic diversification and a presence in all major markets.

Berry’s remaining HH&S businesses including its tapes business, will be retained.

Sister publication Packaging Dive reported that about 60% of the new company’s revenue will be concentrated in the Americas, where 23 of 45 manufacturing facilities are located. It also reported that Berry and Glatfelter already overlap in markets such as laundry care, disinfecting wipes, and healthcare and surgical suite products.

The new combined company will have more than 1,000 customers, with a company presentation listing major CPG and healthcare customers including Clorox, P&G, Kimberly-Clark, Medline, Henkel and Reckitt, among others, Packaging Dive says.

In conjunction with the announcement, Berry will change the name of its Engineered Materials segment to Flexibles to showcase the continued evolution of this segment towards high-value products and solutions.

Kevin Kwilinski, CEO, Berry Global, and Thomas Fahnemann, President and CEO, Glatfelter

Berry, Glatfelter CEOs weigh in on the arrangement.

“This announcement is the culmination of a comprehensive review of strategic alternatives to determine the value-maximizing path forward for Berry shareholders,” says Berry Global CEO Kwilinski. “We believe these two businesses, in combination, can drive significant value for shareholders with complementary portfolios, positioning each for greater success. Following completion of the transaction, Berry will become a pure-play provider of innovative, sustainable global packaging solutions, which we believe will deliver even more predictable earnings growth for Berry shareholders. Additionally, we believe HHNF in combination with Glatfelter will thrive as an independent company that is positioned to drive long-term growth with its global brand-owner customers.”

"The uniting of our organizations creates a premier nonwovens supplier and a global leader in specialty materials, with the talent, technologies, scale, and footprint to deliver commercial and operational excellence, and a wide range of solutions for our customers,” says Thomas Fahnemann , Glatfelter's President and CEO. “Our combined company is scaled to accelerate innovation and leverage our intellectual property over a large worldwide commercial platform and is well positioned to deliver substantial shareholder value.”

For Berry, it brings much-welcomed stability to its portfolio and business plans.