DELAWARE, Ohio, Oct. 30 /PRNewswire/ -- Greif Bros. Corporation
(Nasdaq: GBCOA; GBCOB), the leading U.S. manufacturer of industrial shipping
containers, today announced the signing of a definitive agreement to purchase
the Van Leer industrial packaging division from Huhtamaki Van Leer Oyj of
Espoo, Finland (HEX: HVL1V; AEX: HVL;) for US $620 million, which includes the
assumption of debt and other obligations as of the closing date.
This acquisition will effectively double the size of Greif Bros.
Corporation ("Greif") and give the company a strong competitive position in
the key global markets of Europe, Asia and Latin America. When the acquisition
is completed, Greif will operate in over 200 locations in over 40 countries
with approximately 11,000 employees.
The operations to be acquired are currently organized as Royal Packaging
Industries Van Leer N.V., headquartered in Amsterdam, The Netherlands, and its
subsidiaries worldwide ("Van Leer Industrial"). With net sales of EUR 921
million in 1999, Van Leer Industrial is a leading worldwide provider of
industrial packaging and components, including steel, fibre and plastic drums,
as well as intermediate bulk containers and closure systems. Van Leer
Industrial has over 6,000 employees and operates in over 40 countries,
including the United States, and has a strong presence throughout the world.
"With this acquisition, we are transforming one of America's oldest
industrial companies into a worldwide leader in industrial shipping
containers," said Michael J. Gasser, Greif chairman and chief executive
officer. "Our first priority is to accelerate our historical growth rates and
take advantage of the opportunities in international markets. By combining our
operations with those of Van Leer Industrial, we will create a global platform
for growing our business and will position Greif to provide packaging
solutions for key customers anywhere in the world," Mr. Gasser added.
"Among several interested parties, Greif stood out as a solid company with
a long industry tradition similar to Van Leer's. I am convinced that Greif
will be the ideal new parent for Van Leer Industrial and its people," said
Timo Peltola, chief executive officer of Huhtamaki Van Leer. "Following this
transaction, we will concentrate on consumer packaging, where we already have
reached world leadership positions and see further growth opportunities," Mr.
"Van Leer is the ideal partner at the ideal time for us, and we match up
perfectly from a strategic, operational and cultural standpoint," Mr. Gasser
stated. "Like many traditional industrial businesses, the shipping container
business is shifting rapidly as new technologies and globalization drive
change. Our customers are looking for one-stop, cost-effective packaging
solutions as well as global supply. This transaction will help position us to
leverage these opportunities," Mr. Gasser said.
Recent Growth Initiatives
Mr. Gasser stated that the Van Leer Industrial acquisition is a natural
progression in Greif's growth plan. Within the past several years, the company
has purchased and affiliated with various packaging businesses to strengthen
its North American operations and develop an extensive range of industrial
shipping container and corrugated container products. A Packaging Services
organization was created to better meet customer needs through a broad range
of value-added services, such as container reconditioning, warehousing, and
filling. Greif also increased capital expenditures for new technologies to
modernize and streamline production facilities. In addition, the company has
focused on its timber business toward optimizing its annual return from the
company's 280,000 acres of prime timber and land holdings in the United
The purchase price of US $620 million includes a cash payment and the
assumption of Van Leer Industrial's outstanding indebtedness and other
obligations as of the closing date. The cash portion of the purchase price
will be financed under a new credit agreement that Greif is establishing with
a syndicate of lenders. Greif's net sales were US $818.8 million for the
fiscal year ended October 31, 1999, and Van Leer Industrial's net sales were
EUR 921.3 million for the fiscal year ended December 31, 1999. Earnings before
interest, taxes, depreciation, and amortization (EBITDA) were US $125.6
million for Greif and EUR 97.5 million for Van Leer Industrial on an adjusted
basis in the most recent fiscal years. The transaction is expected to be
accretive to earnings per share within one year from closing.
The transaction will be accounted for as a purchase and is expected to be
completed by December 31, 2000, subject to regulatory and other approvals and
the 30-day right of first refusal by the Van Leer Group Foundation as provided
for in the original transaction between Van Leer and Huhtamaki. Merrill Lynch
& Co. acted as exclusive financial adviser to Greif in this transaction.
About Greif Bros. Corporation
Greif, which is headquartered in Delaware, Ohio, has been a packaging
company since its inception in 1877. Greif provides industrial container and
packaging solutions and services, primarily to North American-based
industries. The company manufactures a broad variety of industrial shipping
containers (which include fibre drums, plastic drums, steel drums, and
intermediate bulk containers) and containerboard and corrugated products
(which include semichemical and recycled medium, recycled linerboard,
corrugated boxes, corrugated honeycomb products, and multiwall packaging) as
well as manages timber properties. Greif has over 5,000 employees in the U.S.,
Canada, and Mexico. Additional company information is on the company's web
site at http://www.greif.com.
Some of the information in this press release contains "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. The words "believe," "expect," "anticipate," "project," and similar
expressions, among others, identify forward-looking statements. Forward-
looking statements speak only as of the date the statement was made. Such
forward-looking statements are subject to certain risks and uncertainties that
could cause the company's actual results to differ materially from those
projected, including the statements that the company's first priority is to
accelerate historical growth rates and take advantage of opportunities in
international markets and provide packaging solutions for key customers
anywhere in the world (paragraph four), that this transaction will help
position the company to leverage business opportunities (paragraph six), that
the transaction is expected to be accretive to earnings per share within one
year from closing (paragraph eight), and that the acquisition will be
completed by December 31, 2000 subject to regulatory and other approvals and
the 30-day right of refusal by the Van Leer Group Foundation (paragraph nine).
Risks and uncertainties that might cause a difference include, but are not
limited to, changes in general business and economic conditions, risks of
doing business in foreign countries, capacity levels in the containerboard
market, competitive pricing pressures, in particular with respect to the price
of paper, litigation or claims against the company pertaining to
environmental, product liability and safety and health matters, risks
associated with the company's acquisition strategy, in particular the
company's ability to locate and acquire other businesses, the company's
ability to integrate its newly acquired operations effectively with its
existing businesses, the company's ability to achieve improved operating
efficiencies and capabilities sufficient to offset consolidation expenses and
the frequency and volume of sales of the company's timber and timberlands.
These and other risks and uncertainties that could materially affect the
financial results of the company are further discussed in the company's Annual
Report on Form 10-K for the year ended October 31, 1999. All forward-looking
statements made in this announcement are based on information presently
available to the management of the company. The company assumes no obligation
to update any forward-looking statements.
Greif Bros. Corporation (Nasdaq: GBCOA; GBCOB) provides industrial
shipping container/packaging solutions to many Fortune 500 companies as well
as a wide range of medium- and small-size businesses located throughout North
America. The company also actively manages timberlands.
With the planned Van Leer acquisition announced October 30, 2000, Greif
will be the worldwide leader in industrial shipping containers.
Customers We Serve
Greif's products and services are integral to the manufacturing and
distribution of various industrial and consumer-related materials. Our diverse
customer base includes the specialty chemical, petroleum, agricultural,
automotive, pharmaceutical, food/beverage, wire, mining, transportation, home
and building products, industrial products, ceramics/glassware, and corrugated
Lines of Business
Industrial Shipping Containers: Greif produces a full-line of fibre drums,
steel drums, plastic drums, and intermediate bulk containers. In addition,
Greif provides total packaging services, including complete container
handling, logistics, and management and value-added services such as
reconditioning of plastic drums and intermediate bulk containers, inventory
management, and drum filling. The company also provides customers with
research, development, engineering, and testing services.
Greif owns 49% of Abzac-Greif, a fibre drum company based in France, and
also has a license agreement with Sotralentz S.A. of France for intermediate
The planned Van Leer acquisition extends Greif's capabilities in
industrial shipping containers to meet the global needs of customers.
Containerboard & Corrugated Products: Greif produces semi-chemical and
recycled medium, recycled linerboard, corrugated sheets, corrugated
containers, corrugated materials for transit protection (dunnage) and as void
fillers, and multiwall packaging. In addition, Greif provides full design,
graphics, and testing services, color printing, and total packaging services.
Timber: From its 280,000 acres of timberlands in the southeastern United
States, Greif supplies pine and hardwood timber for the pulp wood, saw timber,
and chip/saw wood industries. The company also owns approximately 40,000 acres
Greif reported $818.8 million in net sales for the fiscal year ended
October 31, 1999. Net income for FY 1999 was $51.4 million.
The Van Leer industrial packaging division reported EUR 921 million for
the fiscal year that ended December 31, 1999.
Recent Business Highlights
-- Announced plans to acquire Van Leer industrial packaging from Huhtamaki
Van Leer Oyj
-- Reported record first, second, and third quarter results
-- Formed third line of business - Timber, and entered into a timber
management agreement to actively harvest and regenerate the company's
-- Purchased Great Lakes Corrugated Corp. in Ohio
-- Acquired 49% equity interest in Abzac's fibre drum business in France
-- Formed CorrChoice, an Ohio-based joint venture to produce sheets for
the corrugated industry
-- Acquired Sonoco Products Company's North American industrial shipping
-- Restructured the company into two lines of business -- Industrial
Shipping Containers and Containerboard & Corrugated Products
-- Purchased two steel drum plants located in California and Ontario from
-- Purchased Independent Container Company with operations in Kentucky and
-- Purchased Centralia Container, Inc. in Illinois
-- Purchased Aero Box Company in Michigan
-- Purchased Decatur Container Corporation in Illinois
-- Purchased Kyowva Corrugated Container Company with operations in West
Virginia and Kentucky.
Michael J. Gasser, Chairman and Chief Executive Officer
William B. Sparks, Jr., President and Chief Operating Officer
Charles R. Chandler, Vice Chairman and President of Soterra LLC
Joseph W. Reed, Chief Financial Officer and Secretary
John S. Lilak, Executive Vice President, Containerboard & Corrugated
Michael L. Roane, Vice President, Human Resources
Greif is headquartered in Delaware, Ohio, approximately 20 miles north of
425 Winter Road
Delaware, OH 43015
Employees and Locations
Greif has over 5,000 employees in approximately 100 operations and offices
in the United States, Canada, and Mexico.
With the Van Leer acquisition, Greif's operations will consist of
approximately 200 locations in over 40 countries and 11, 000 employees.
Mr. Charles Greif co-founded the company in 1877 as a wooden barrel and
keg manufacturer based in Cleveland, Ohio. His brothers later joined the
company. The company has operated continuously under the Greif name as a
packaging company for 123 years.
For Additional Information:
Greif Bros. Corporation
Robinson Lerer & Montgomery
Robert A. Lentz and Associates
Robinson Lerer & Montgomery
SOURCE Greif Bros. Corporation