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Exhibit 99
PRESS RELEASE DATED OCTOBER 30, 2000
ISSUED BY THE COMPANY
FOR IMMEDIATE RELEASE
GREIF BROS. CORPORATION TO ACQUIRE VAN LEER
INDUSTRIAL PACKAGING IN $620 MILLION TRANSACTION
Greif to be Worldwide Leader in Industrial Shipping Container
Business With Global Platform for Growth in European, Asian and
Latin American Markets
International Transaction Transforms One of America's Oldest
Heartland Corporations; Globalization Powering Fundamental
Change in Container Business
Greif Expands Ability to Deliver Integrated Packaging and
Shipping Solutions to Multinational Corporations
DELAWARE, Ohio (October 30, 2000) - 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 and 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.
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"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. Peltola noted.
"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 States.
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Financial Information
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 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
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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.
# # #
For Additional Information:
Media Inquiries:
Krista Heins
Director, Communications
Greif Bros. Corporation
740-549-6074
[email protected]
Anita Bose
Robinson Lerer & Montgomery
212-484-7699
[email protected]
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Shareholder/Analyst/Investor Inquiries:
Robert Lentz
Robert A. Lentz and Associates
614-876-2000
[email protected]
Anita Bose
Robinson Lerer & Montgomery
212-484-7699
[email protected]
Greif Bros. Corporation's web site is www.greif.com.
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