Silgan to buy Graham Packaging for $4.1 billion

Silgan to buy Graham Packaging for $4.1 billion

The combined company will create a leading worldwide food and beverage franchise and a strong supplier of metal cans, closures and rigid plastic containers. The combined company will employ more than 17,000 associates in 19 countries through a network of approximately 180 plants and will have annual sales in excess of $6.2 billion.

With its broad and diversified product offerings, the combined company will be better positioned to provide a portfolio of packaging solutions for its customers and more effectively service those customers ever changing needs. Likewise, the combination will help strengthen the merged entities' ability to deliver consistent and stable earnings growth that will result in long term shareholder value accretion.

"Graham Packaging's commitment to innovation and technology has enabled us to build a differentiated company that has become a leader in the markets that we service for our global customers," said Mark Burgess, Graham Packaging's CEO.

"Likewise, our focus on operating excellence and disciplined business management has allowed Graham to successfully improve its performance and metrics significantly, resulting in our initial public offering last year. In combination with Silgan, we look forward to servicing customers even more effectively and providing them with sustainable and innovative packaging solutions that help them create winning products for the consumer. We are excited about the opportunities provided by the business combination and the advantages and complementary factors associated with our businesses."

Terms of the agreement
Under the terms of the merger agreement, each outstanding share of Graham Packaging common stock will be converted into the right to receive $4.75 in cash and 0.402 shares of Silgan common stock, subject to the terms of the merger agreement. Based on the closing price of Silgan stock as of April 12, 2011, the stock component is valued at $14.81 per share. The transaction provides immediate value to Graham Packaging shareholders through the cash component, as well as continued participation in the future prospects of the combined company through their ownership of approximately 29 percent of Silgan's shares.

At the closing of the merger, the surviving corporation will be making an aggregate cash payment of $245 million pursuant to contractual change in control provisions in the Company's income tax receivable agreements with Blackstone Capital Partners III L.P. and the Graham family. These agreements were entered into prior to Graham Packaging's February 2010 IPO, and reference is made to the company's prior public filings for further information concerning such agreements.

The transaction was unanimously recommended by a special committee of the Graham Packaging Board of Directors and was then unanimously approved by Graham's full Board of Directors. Consummation of the transaction is subject to customary closing conditions, including the receipt of domestic and foreign regulatory approvals and the approval of Graham Packaging and Silgan stockholders.

When the merger is completed, Graham Packaging Co. L.P., which is the issuer of various series of notes, will merge with and into the surviving corporation in the merger, which corporation will succeed to such issuer's obligations under such indebtedness.

Advisors
Simpson Thacher & Bartlett LLP served as legal counsel to Graham Packaging.
Abrams & Bayliss LLP acted as legal advisor and J.P. Morgan Securities, LLC acted as financial advisor to the special committee of the board of directors of Graham Packaging.

The proposed merger transaction involving Silgan and Graham will be submitted to the respective stockholders of Silgan and Graham for their consideration. In connection with the proposed merger, Silgan will prepare a registration statement on Form S-4 that will include a joint proxy statement/prospectus for the stockholders of Silgan and Graham to be filed with the Securities and Exchange Commission (the "SEC"), and each will mail the joint proxy statement/prospectus to their respective stockholders and file other documents regarding the proposed transaction with the SEC as well. Silgan and Graham urge investors and stockholders to read the joint proxy statement/prospectus when it becomes available, as well as other documents filed with the SEC, because they will contain important information. Investors and security holders will be able to receive the registration statement containing the proxy statement/prospectus and other documents free of charge at the SEC's web site, from Silgan at 4 Landmark Square, Suite 400, Stamford, CT 06901, or from Graham at 2401 Pleasant Valley Road, York, PA 17402.

About Graham Packaging
Graham Packaging is a leading U.S. supplier of plastic containers for hot-fill juice and juice drinks, sports drinks, drinkable yogurt and smoothies, nutritional supplements, wide-mouth food, dressings, condiments and beers; the leading global supplier of plastic containers for yogurt drinks; a leading supplier of plastic containers for liquid fabric care products, dish care products and hard-surface cleaners; and the leading supplier in the U.S., Canada and Brazil of one-quart/liter plastic motor oil containers. Graham Packaging proforma net sales (after taking into account the acquisition of Liquid Container in September 2010), approximates $2.8 billion. The company employs more than 8,100 associates in 15 countries through 97 manufacturing facilities.

About Silgan Holdings
Silgan Holdings is a leading manufacturer of consumer goods packaging products with annual net sales of approximately $3.1 billion in 2010. Silgan operates 83 manufacturing facilities in North and South America, Europe and Asia. Silgan is a leading supplier of metal containers in North America and Europe, and a leading worldwide supplier of metal, composite and plastic vacuum closures for food and beverage products. In addition, Silgan is a leading supplier of plastic containers for personal care products in North America.

Source: Graham Packaging Co.

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