Page 48 - Plastics News March 2019

BUSINESS NEWS

Berry buys RPC for $4.37 billion Haldia Petro to invest Rs 28,700
offer cr in Phase-I in Odisha

ritish packaging company RPC Group has agreed to a Haldia Petrochemicals Ltd (HPL) has committed an
Bhigher takeover offer from plastics maker Berry Global investment of Rs 28,700 crore ($4.05 billion) in the first
Group Inc worth 3.34 billion pounds ($4.37 billion), and phase on its Odisha project. The petrochemicals major
has ditched a lower bid from Apollo Global Management will set up an integrated refinery with aromatics complex
LLC. According to a report from Reuters, RPC, Europe’s for production of Paraxylene and Purified Terephthalic
biggest plastic packaging group had revoked support Acid (PTA) near Subarnarekha Port in Balasore district.
for Apollo’s offer in favor of Berry Global and said its Haldia Petrochemicals (HPL), the biggest investor at
directors would recommend shareholders to vote in
‘Make in Odisha 2018’ conclave, plans to deploy an
innovative technology for its project that seeks to
convert crude oil into chemicals and petrochemicals
directly.As opposed to the customary production
of refined petroleum products, HPL’s plant will
concentrate on higher output of petrochemicals.“They
will be setting up the refinery to produce chemicals
and petrochemicals. The direct conversion of crude to
petrochemicals will be the first of its kind in the country
unlike other refineries, which are producing petroleum
products. Such technologies are used widely in China,”
said an official privy to the development.HPL, the
favor of the new offer. Berry’s offer of 793 pence in cash West Bengal-based petrochemicals company, is setting
for each RPC share is 1.4 percent higher than Apollo’s up an integrated refinery with aromatic complex for
offer, and represents a premium of 3.5 percent to RPC’s production of paraxylene and purified terephthalic acid
closing price on Jan. 30, the last day before Berry said (PTA) units in the first phase. The production capacity
it was weighing a bid for RPC. Berry’s bid for RPC marks of paraxylene unit will be 1.6 million tonne per annum
the latest in M&A deals in the packaging sector, which (mtpa) and PTA will have 2.5 mtpa capacity.The first
private equity firms have been focusing on for its stable phase of the HPL project approved is expected to be
cashflow and demand from online shopping. Packaging operationalised within five years of allotment of land.
maker DS Smith Plc this week agreed to sell its plastics HPL has committed an investment of Rs 28,700 crore
business to a private equity company.

Evansville, Indiana-based Berry Global, which plans to
fund the purchase through debt, began showing interest
in RPC after Apollo had sealed the deal. Berry said RPC’s
products are highly complementary to Berry’s existing
businesses and will allow the combined company to be a
bigger player in the highly fragmented global market for
plastic packaging. Berry Global Group, Inc. manufactures
and supplies non-woven, flexible, and rigid products. The
company operates through three segments: Engineered
Materials; Health, Hygiene & Specialties; and Consumer
Packaging. The Engineered Materials segment offers ($4.05 billion) in the first phase on its Odisha project.
engineered materials, including stretch and shrink films, Recently, the High Level Clearance Authority (HLCA) in
and converter films; trash-can liners and food bags; cloth Odisha headed by Chief Minister Naveen Patnaik gave its
and foil, and many more. nod to the proposal, which HPL submitted on March 1.

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