Silgan to Buy Graham Packaging for $4.1B

Consumer goods packager Silgan Holdings (NASDAQ:SLGN) has inked a deal to acquire Graham Packaging (NYSE:GRM) in a cash and stock deal valued at $4.1 billion, including debt, in an effort to expand its exposure to the food and beverage industry.

The deal, slated to close in the second half of this year, will result in a company employing a total of 17,000 workers in 180 plants worldwide, with sales expected to exceed $6.2 billion.

Graham stockholders will receive $4.75 and 0.402 share of Silgan common stock for each of their Graham shares. The deal represents a 17% premium to its closing price on Tuesday.

“This acquisition creates the premier food and specialty beverage packaging company, allowing Silgan to significantly broaden its ability to serve these important markets with multiple rigid packaging options,” Tony Allott, Silgan’s chief executive said in a statement.

The move comes days after private equity company Blackstone (NYSE:BX), which holds a 61% stake in Graham, received approval by the European Union to buy Mivisa, a food-can maker based in Spain.

The deal, which has been unanimously approved by both companies’ boards of directors, will provide a wide portfolio of packing solutions, including metal cans, closures and rigid plastic containers.

Each of Silgan’s co-chairmen, Philip Silver and Greg Horrigan, who together own 29% of the company, have agreed to vote their shares in favor of the deal. Blackstone, and the Graham Family, who collectively own 65% of Graham’s common shares, have also agreed to vote in favor of the deal.