Amcor shares slide on $13b Berry acquisition

The news: Amcor shares lowered at market open on the ASX after the packaging giant announced the $13 billion acquisition of US-based Berry Global overnight.

The numbers: Amcor shares were down 2.6% to $15.29 in early trading.

The context: Morgan Stanley analysts noted that the proposed merger targets attractive earnings-per-share growth, though this relies on a "robust synergy figure" that will likely be met with "healthy skepticism" from the market. However, they said that Amcor's track record on acquisition execution and synergy delivery is solid and likely garners the benefit of doubt.

Elsewhere, Citi analysts called the acquisition "logical" as both plastic packagers hold leading market positions but have struggled with organic volume growth. The merged group will be the largest global plastic packager "by far", they noted, with unmatched procurement scale and R&D capabilities.