EVANSVILLE, Ind. - Berry Global Group, Inc. (NYSE: NYSE:BERY) and Glatfelter Corporation (NYSE: GLT) have cleared a significant regulatory hurdle in their planned merger, with the expiration of the waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act.
This development marks a step forward in the process of combining a majority of Berry’s Health, Hygiene, and Specialties segment with Glatfelter, a move that was initially announced on February 7, 2024.
The transaction, structured as a Reverse Morris Trust, is on track to be completed in the second half of 2024. It remains subject to the approval of Glatfelter shareholders and the satisfaction of customary closing conditions. The deal is expected to establish a new, publicly-traded leader in the specialty materials industry.
Both Berry and Glatfelter have cautioned that statements regarding the anticipated benefits and timing of the transaction are forward-looking and subject to risks and uncertainties.
These include the possibility of delays or the failure to receive necessary regulatory approvals or meet other closing conditions. Additionally, the anticipated tax treatment of the transaction may not be achieved, and there is potential for litigation related to the merger.
The companies have also noted that the proposed transaction could result in disruption to their businesses, including the retention of customers and key personnel. The integration of the combined company could also prove more challenging than expected.
In preparation for the merger, the companies will continue to file relevant materials with the Securities and Exchange Commission (SEC), including a registration statement containing a proxy statement/prospectus. Stockholders are urged to read these documents, as they will contain important information about the proposed transaction.
The proposed merger is part of a strategic move by Berry and Glatfelter to leverage their combined capabilities in the specialty materials market. Berry is known for its innovative packaging solutions and sustainability leadership, while Glatfelter is recognized for its engineered materials used in a variety of applications, from personal care to industrial use.
This news article is based on a press release statement from Berry Global Group, Inc. and Glatfelter Corporation.
InvestingPro Insights
As Berry Global Group, Inc. (NYSE: BERY) and Glatfelter Corporation (NYSE: GLT) advance towards their merger, investors are closely monitoring the financial health and market standing of the involved companies. Glatfelter Corporation, in particular, presents a mix of challenges and opportunities according to recent data from InvestingPro.
Glatfelter's market capitalization stands at a modest $72.24 million, reflecting a smaller size in the industry. The company's Price / Book multiple, as of the last twelve months leading up to Q4 2023, is remarkably low at 0.31, which could suggest that the stock is potentially undervalued relative to its assets. This is a notable point for investors considering the equity stability in the upcoming merger.
However, Glatfelter's financials also reveal some concerns. The company has been operating with a significant debt burden and has a negative P/E ratio of -0.91, which worsened to -1.24 on an adjusted basis in the same period. This indicates that the company was not profitable over the last twelve months. Additionally, with a gross profit margin of just 9.36%, Glatfelter's ability to convert sales into profit appears weak. Despite these challenges, Glatfelter has seen a strong return over the last three months, with a 28.06% price total return, showcasing some investor confidence.
InvestingPro Tips for Glatfelter highlight the company's liquidity position, with liquid assets exceeding short-term obligations, providing some comfort regarding near-term financial stability. Still, investors should be aware that the company does not pay dividends, which could be a consideration for those seeking income-generating investments.
For those interested in a deeper analysis, InvestingPro offers additional insights and tips on Glatfelter, which can be accessed at: https://www.investing.com/pro/GLT. Using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking further valuable financial metrics and investment guidance.
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