Berry explores alternatives for Health, Hygiene Business struggling with weak demand

USA – Berry Global has initiated a formal process to evaluate strategic alternatives for its Health, Hygiene, and Specialties (HH&S) segment struggling with weaker demand, unfavorable price-cost spread.

HH&S supplies nonwovens, specialty films, and tapes to a range of end markets, including healthcare, hygiene, consumer, building and construction, and industrials.

Options for HH&S under consideration by Berry include but are not limited to, a sale, strategic partnership or joint venture, spin-off to shareholders, or other separation transaction for some or all of the businesses within HH&S.

In the recently reported Q3, the Health, Hygiene, & Specialties segment saw a 7% volume decline, primarily attributed to weaker demand in specialty markets, such as filtration and building and construction, including destocking, partially offset by growth in disinfectant wipes.

The segment also saw a US$20 million unfavorable impact from the price cost spread in Q3, a US$9 million adverse effect from increased business integration costs, and a negative impact from the volume decline.

The HH&S segment provides nonwovens, specialty films, and tapes for various end markets, including healthcare.

Berry Global expects current members of the segment leadership team to lead the business in any anticipated outcome.

Tom Salmon, Berry Chairman and CEO said: “As always, we will be disciplined throughout this process and will only take actions that we believe are in the best interest of the Company and our stakeholders.

“Following an extensive analysis by the board and management team, with support from our incoming CEO Kevin Kwilinski, we have decided to explore strategic alternatives for the HH&S businesses as we continue to seek to enhance value through strategic portfolio management.

“As always, we will be disciplined throughout this process and will only take actions that we believe are in the best interest of the company and our stakeholders.”

Berry has not set a deadline or timetable for completion of the strategic alternatives process. There can be no assurance any proposal will be made or accepted, any agreement will be executed, or any transaction will be consummated, in connection with this review, added the company.

The board has retained Citigroup Global Markets Inc. and Wells Fargo Securities LLC as its financial advisors, and Bryan Cave Leighton Paisner LLP as its legal advisor to assist with the strategic alternatives process.

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