US packaging giant Berry Global (Evansville, Indiana; www.berryglobal.com) said it has spun off most of its Health, Hygiene, and Specialties (HH&S) operations, including its global nonwovens and films activities, and merged them with manufacturer Glatfelter (Charlotte, North Carolina, USA; www.glatfelter.com). The new business is expected to generate revenues of USD 3.6 bn (EUR 3.3 bn) and adjusted earnings of USD 455 mn.

The deal, backed by both companies’ shareholders and expected to be completed by the end of 2024, followed a strategic review carried out by Berry to determine what it called “the value-maximising path” for its shareholders. The US packaging firm said it would retain the remaining HH&S operations, including its tapes business.

Related: Berry considers sale of films and nonwovens division

Berry and Glatfelter said their shareholders will own 90% and 10% of the new combined company, respectively, while Berry stands to receive an approximate net USD 1 bn when the deal is completed. It said it would use the money to pay down existing debt. Cost synergies from the deal are expected to top USD 50 mn by the third year following the merger.

The new, publicly-traded firm, to be renamed and rebranded on completion, will be led by Curt Begle, the current head of Berry’s HH&S operation, as chief executive. Additional members of the combined company’s senior management team will be announced at a later date, Berry added.

Last year, Berry posted pro-forma revenue of USD 10 bn and USD 1.8 bn in adjusted EBITDA.