US packaging specialist Berry Plastics (Evansville, Indiana; www.berryplastics.com) has entered into a definite merger agreement with fellow US plastic packaging films producer AEP Industries (Montvale, New Jersey; www.aepinc.com). Under the terms of the USD 765m deal, which still needs to be approved by AEP’s shareholders and the regulatory authorities, Berry will acquire all outstanding AEP shares in a cash and stock transaction. The two companies expect the deal to close in December this year.

Once all is said and done, AEP will become part of Berry’s Engineered Materials division, creating a North American packaging film powerhouse. New Jersey-based AEP brings with it 14 production plants in the US and Canada, home to about 2,600 employees. Specialised in the manufacture of flexible plastic packaging products for the consumer, industrial and agricultural markets, the company posted net sales of USD 1.1 bn for the four quarters ended in April 2016, with net income of USD 39m and adjusted EBITDA of USD 103m.

The larger of the two players, with adjusted EBITDA of USD 1.2 bn for the four quarters ended June 2016, Berry said the combination is a “highly complementary fit”, and will provide complementary production capacities, while also reducing material and conversion costs. The company said it expects the merger to yield cost synergies of USD 50m and more annually.

Berry Plastics in late 2015 reorganised its operations into three business units, of which Engineered Materials is one. The restructuring followed the company’s acquisition of infection prevention materials producer Avintiv (Charlotte, North Carolina / USA; www.avintiv.com), which is now part of its Health, Hygiene and Specialties division (see Plasteurope.com of 20.11.2015).