Chicago — Amcor plc is selling its share of a long-time joint venture that makes closures for the food, beverage and industrial markets in North America.
The decision to end a partnership with Bericap GmbH & Co. comes down to money — more specifically a difference of opinion between the two partners about how much to invest in the Bericap North America joint venture.
"It was really about growing the business and what it was going to take to do that. And it was just going to take a lot of capital," said Kristin Kelley, vice president of government affairs and corporate communications for Amcor Rigid Packaging. "And to do that in the closure space requires a different level of capital investment. ... I think we have a formula for doing it and they have a formula for doing it for capital allocation."
"We have a difference of opinion on how to do that, and so we realized that it was best to part ways," she said. "I believe that they are more aggressive with their capital allocation than we are."
Kelley talked about the decision to exit the joint venture on Nov. 3 while on the floor of Pack Expo in Chicago.
Bericap, based in Budenheim, Germany, will pay Amcor $122 million for the 50 percent of the BCNA that Amcor owns.
BCNA, which has manufacturing sites in Cowpens, S.C.; Burlington, Ontario; and Mexico City, had sales of $190 million in 2023 and adjusted earnings before interest and taxes of about $19 million. Financial results of the BCNA business, for Amcor, were reported under the company's Amcor Rigid Packaging division.
Amcor is one of the world's largest plastics packaging companies and said the loss of business is not material to the company. Amcor, which also has a substantial flexible packaging division, had $13.6 billion in sales in fiscal year 2024. Proceeds from the sale will be used to pay down debt.
Amcor, which expects the deal to close on or before Dec. 31.
Amcor CEO Peter Konieczny struck a consolatory tone in talking about the decision.
"We've had a long and respectful relationship with Bericap over the past 27 years. At this juncture, we have chosen to unwind the joint venture given differing views on near-term capital requirements and resulting returns," he said in a statement.
"While Amcor continues to operate in the closures space as it remains a category of interest, we are committed to maintaining our disciplined approach to capital allocation. We thank the Bericap team for the many years of partnership and we wish them well for the future."
Kelley expects Amcor, a powerhouse in rigid plastic container making, will continue to do business with closure maker Bericap as a "value chain partner" even after the joint venture ends.