Silgan’s €838M purchase of Weener Plastics Holdings: What does it signal for the industry?
26 Jul 2024 --- Silgan Holdings is acquiring Weener Plastics Holdings, a producer of dispensing solutions for personal care, food and healthcare products for €838 million (US$909 million).
Last year, Weener generated sales of approximately €450 million (US$488 million) and adjusted EBITDA of €96 million (US$104 million). Silgan expects to achieve cost savings of €20 million (US$21.7 million) within 18 months of the acquisition.
“The logic behind the Weener purchase is simple: Silgan has been greatly expanding its dispensing business in recent years through a series of acquisitions. It purchased Albea’s dispensing business in 2020 for US$900 million and WestRock`s dispensing business in 2017 for US$1 billion,” market analyst Neil Farmer tells Packaging Insights.
Weener operates a global network of 19 facilities predominantly in Europe and the Americas, with approximately 4,000 employees and proprietary manufacturing technologies including significant clean room capabilities.
“The proposed acquisition of Weener represents the continuation of our strategy to expand our global Dispensing and Specialty Closures franchise and a clear example of the effectiveness of our disciplined capital allocation model to create value for our shareholders,” says Adam Greenlee, president and CEO.
“The combination of Weener’s innovative product offering, advanced manufacturing technologies and efficient operating footprint, strong customer relationships and presence in growing consumer markets, including personal and health care, complements our existing dispensing business well.”
“As the Silgan portfolio continues to evolve, we believe we are well positioned to succeed in the market as the dispensing partner of choice by maintaining our relentless focus on being the best at what we do and meeting the unique needs of our customers.”
Acquisition details
The acquisition is expected to close in the fourth quarter of 2024 and is subject to applicable regulatory approvals and certain other customary conditions.
The purchase price for this proposed acquisition is subject to adjustments set forth in the purchase agreement. Silgan expects to fund the purchase price for this proposed acquisition with a combination of cash on hand and borrowings under its senior secured credit facility.
“The deal continues the M&A activity in the global packaging market, which shows no sign of abating,” says Farmer.
Recently, Russian President Vladimir Putin signed a decree ordering the temporary seizure and nationalization of Silgan Holdings production sites in Russia.
By Louis Gore-Langton
