Berry Global completed a transaction to spin off its Health, Hygiene and Specialties Global Nonwovens and Films business and merge it with Glatfelter. The new company, Magnera, will begin trading on the New York Stock Exchange on Nov. 5.
“With this move to optimize our portfolio, we solidify our position as a global leader of consumer-focused packaging solutions while enhancing the stability of our earnings, free cash flow and growth. We are confident that employees transferring to Magnera will benefit from the new company’s strong leadership and focused capabilities, and we are grateful for their contributions,” said Berry CEO Kevin Kwilinski in a statement.
The release described Magnera as “the largest nonwovens company in the world,” with the ability to create material for a range of products.
Berry spun off all outstanding shares of the subsidiary that owned the HHNF business on Nov. 1 and that entity was then merged into a subsidiary under Magnera. Berry stockholders now own an estimated 90% of Magnera stock, with Glatfelter shareholders owning the remainder.
Berry first announced the deal to spin off this segment in February, which it said would streamline its focus on consumer packaging. At the time, Kwilinski said the division was hurting Berry’s stock value because “it was different enough from our long-term, consumer-facing business in packaging that it created volatility.”
In July, the two companies announced that the new entity would be known as Magnera. Curt Begle, previously the president of Berry’s Health, Hygiene and Specialties division, was selected to serve as CEO of Magnera.
“Magnera will be a global leader in the specialty materials industry with the broadest global product offering in high-growth markets for both polymer and fiber-based product applications,” Berry CFO Mark Miles said during the company’s most recent earnings call.
According to a September 2024 proxy statement, executives from Glatfelter and Berry first discussed a possible deal in August 2023. This came after Glatfelter CEO Thomas Fahnemann initiated a “turnaround strategy” in 2022 that included the assessment of possible acquisitions, divestitures or other transactions.
In September 2023, Berry announced it was reviewing strategic alternatives for its health and hygiene assets. In subsequent months teams from the companies negotiated terms of ownership, with Glatfelter initially proposing that it would own as much as 15% of Magnera. The companies announced an agreement in February. Glatfelter later received an unsolicited offer from an unspecified “strategic acquiror” but chose not to engage further.
Glatfelter shareholders approved the transaction on Oct. 23. Glatfelter reported net sales for the most recent quarter of $332 million, approximately flat year over year.
Berry has not yet announced the timing for its own Q3 results. The company’s HHS division most recently reported Q2 net sales of $646 million, down 5% year over year.
