Two of the world’s largest nonwovens producers are joining forces to add value to their shareholders and create innovative polymer- and fiber-based solutions to their customers. Berry Global Group and
Together, the two companies, which are both based in the U.S., operate 45 manufacturing sites globally, spanning a range of nonwovens and nonwovens-adjacent technologies focused strongly on healthcare, hygiene, wipes and specialty end markets. Following the deal, Berry shareholders will control 90% of the company. Curt Begel, president of Berry’s HHS business, will serve as CEO of the new company, while the upper management team will consist of a combination of Berry and Glatfelter executives. Combined revenues were reported at $3.6 billion.
“This announcement is the culmination of a comprehensive review of strategic alternatives to determine the value-maximizing path forward for Berry shareholders,” says
The merger comes less than six months after Berry’s announcement in September 2023 that it would review strategic alternatives for its HH&S’ segment as part of an effort to focus more squarely on its global packaging business. According to Kwilinski, the deal with Glatfelter was chosen because it is able to create substantial value for Berry shareholders as well as a clear path for the company to capitalize on growth within the nonwovens industry.
While Berry’s nonwovens business has faced challenges in the past 12 months due mainly to the impact of excessive growth and investment during the Covid-19 pandemic and supply chain challenges, the company expects to see low- to mid-single digit growth in the near term.
“As the industry comes to a little bit of a reset—as you can see from some of the major CPGs— we are seeing much more balanced opportunities from a volume standpoint,” Begel says. "The long-term growth dynamic is to continue to produce innovation products and an improved mix to our customers.”
The combined platforms of the two companies offer complementary sustainable fiber-based products and polymer-based materials. Glatfelter, as the world's largest manufacturer of airlaid nonwovens, counts wood-based pulp and cellulose as its key raw materials, while a large portion of Berry's output is focused on spunmelt nonwovens for healthcare and hygiene applications, which are largely polypropylene-based.
“What each of the companies longed for and didn’t have, we now have and it’s creating an opportunity to bring more solutions to our customers,” Begel adds.
For the first quarter of 2024, Berry reported HHS sales at $603 million, representing a decline attributed to a decrease in selling prices of
Berry Goes Back to Its Roots in Packaging
Since acquiring the nonwovens business from Avintiv in 2015, Berry has made two major acquisitions within the packaging side of its business—RPC in 2019 and AET in 2016— that have helped it achieve its goal of creating a global presence and scale to be a more effective competitor on the world stage. Meanwhile, the nonwovens business, with its cyclical nature and intense capital investments, have not fit as well into the company’s overall scope.
“When we make an investment (in HHS), it is much larger in scale,” Kwilinski says. “If we put in an injection line or a thermobonding line, it might be a $10 million investment, but to put in a unit of capacity in the HHS business, it's more on scale of eight to 10 times that. That created a lumpiness as that capacity comes online and the market is absorbing it, expeically if others are making investments at the same time. That created a lot more volatility of earnings and that is the core issue of this business being a part of Berry. It was different enough from our consumer-facing business in packaging that caused us to trade at a discount multiple.”
In recent years, Berry has made several significant investments to its nonwovens business including two state-of-the-art spunmelt lines in Nanhai, China, and a sustainably-focused spunlace line in Cujik, The Netherlands. Additionally, during the Covid-19 pandemic in 2020-2021, Berry added several lines globally dedicated to the production of meltblown nonwovens, the key material used in face masks and respirators.
Glatfelter meanwhile has aggressively expanded its nonwovens manufacturing footprint since entering the market through the acquisition of airlaid producer Concert Industries in 2010. Most recently, the company acquired Jacob Holm’s spunlace business, including manufacturing sites in North Carolina, Germany and France, as well as Georgia-Pacific’s airlaid operations in the U.S. and Germany.
The proposed transaction represents the next significant milestone in Glatfelter's strategy as a leading global supplier of specialty materials. The combination of Berry’s HHNF business and Glatfelter provides meaningful scale given the complementary technology and product portfolios, along with a platform for considerable growth in future periods.
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Merger and Acquisition Activity in Nonwovens
Berry Global 2022 Top Companies Profile
Glatfelter 2022 Top Companies Profile
