BY Richard Summerfield
In a deal that will create the world’s biggest paper and packaging company, Smurfit Kappa has agreed to acquire its rival WestRock for $11bn.
The newly combined company will be known as Smurfit WestRock and will be run through a holding company incorporated and domiciled in Ireland. Subject to the satisfaction of closing conditions, the transaction is expected to complete in the second quarter of 2024.
Under the terms of the deal, WestRock shareholders will receive one Smurfit WestRock share and $5 cash, equivalent to $43.51 per share, while Smurfit Kappa shareholders will receive one new share. Existing Smurfit Kappa shareholders are expected to own approximately 50.4 percent of Smurfit WestRock and WestRock stockholders the remaining 49.6 percent.
According to a statement announcing the deal, the combined company will opt for a New York primary listing as around 65 percent of its revenues are set to be in the US and Latin America, and because “multiples and the pool of capital over there is bigger for companies like ours”.
The companies had a combined revenue of roughly $34bn in the year to July, which would make Smurfit WestRock the largest listed global packaging firm by that metric. At present, Smurfit, which operates in 22 European countries and 13 in South, Central and North America, is Europe’s largest paper and packaging producer. WestRock is the second-largest packaging company in the US.
“This incredibly exciting coming together of our two great companies is a defining moment within the global packaging industry,” said Tony Smurfit, chief executive of Smurfit Kappa. “Smurfit WestRock will be the ‘Go-To’ packaging partner of choice for customers, employees and shareholders. We will have the leading assets, a unique global footprint in both paper and corrugated, a superb consumer and specialty packaging business, significant synergies, and enhanced scale to deliver value in the short, medium and long term.”
“We look forward to working with Smurfit Kappa to build a leading global platform that harnesses the strength of WestRock’s consumer portfolio, presents a truly comprehensive offering of packaging solutions for customers and delivers meaningful value to our shareholders today and into the future,” said David Sewell, chief executive of WestRock. “Smurfit Kappa shares our deep commitment to innovation across the packaging lifecycle, and we are confident that Smurfit WestRock will continue to lead the industry forward.”
News: Smurfit Kappa strikes $11 bln WestRock deal to create packaging leader