Glatfelter Corporation (NYSE:GLT) entered into definitive agreement to acquire Health, Hygiene and Specialties Global Nonwovens and Films Business of Berry Global Group, Inc. (NYSE:BERY) on February 6, 2024. Under the agreement, Berry to spin-off and merge the majority of its Health, Hygiene and Specialties segment to include its Global Nonwovens and Films business (?HHNF?) with Glatfelter, to create a leading, publicly-traded company in the specialty materials industry. Transaction values the combined company at $3.6 billion on an enterprise value basis. The transaction is being structured as a Reverse Morris Trust transaction and is intended to be tax-free to Berry, Glatfelter and their respective shareholders for U.S. federal income tax purposes. Berry and Glatfelter shareholders to own 90% and 10% of the combined company, respectively. Berry to receive an approximate net $1 billion cash distribution at closing. The new, publicly-traded company, which will be renamed and rebranded by transaction close, will be led by Curt Begle, Berry?s current President of HH&S, who will serve as Chief Executive Officer. Prior to the completion of the Merger, Glatfelter and HHNF will continue to operate as independent companies. The new combined company (?NewCo?) will become a global leader in the growing specialty materials industry, serving the world?s largest brand owners across global end markets with favorable long-term growth dynamics. The Board of Directors of the combined company will initially be comprised of nine total members, consisting of six designated by Berry and three designated by Glatfelter. The chairman will be designated by Glatfelter. Acquired business reported a revenue of $2.2 billion and EBITDA of $290 million for the year ended December 31, 2023. Upon the termination of the RMT Transaction Agreement under specified circumstances, Glatfelter will be required to pay the Company a termination fee of $10 million, or the Company will be required to pay Glatfelter a termination fee of $10 million.

Completion of the Merger is subject to the satisfaction or waiver of certain closing conditions, including, among other things, consummation of the Distribution; approval of the required transactions by Glatfelter?s shareholders; the listing of Glatfelter common stock issuable to holders of Spinco Common Stock on the NYSE; receipt of applicable regulatory approvals, including the expiration or early termination of the statutory waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other required regulatory approvals; the effectiveness of the registration statements to be filed by Glatfelter and Spinco with the Securities and Exchange Commission (the ?SEC?) pursuant to the RMT Transaction Agreement. The Boards of Directors of Berry and Glatfelter have unanimously approved the transaction. As of April 17, 2024, Berry Global Group and Glatfelter achieved regulatory milestone in the proposed transaction. In April, the Company achieved a regulatory milestone with the expiration of the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. Closing of the transaction is expected to occur in the second half of calendar 2024. The transaction is expected to be leverage neutral to Berry.

Citigroup Global Markets Inc. and Wells Fargo are serving as financial advisors to Berry, and Bryan Cave Leighton Paisner LLP is serving as legal advisor to Berry. J.P. Morgan Securities LLC is serving as financial advisor to Glatfelter, and Jonathan Newton and Rob Leclerc of King & Spalding LLP are serving as legal advisor.