Corrugated packaging giant Smurfit Kappa has agreed to acquire Westrock in a landmark deal that will see the establishment of a new combined holding company, dubbed ‘Smurfit WestRock’.
This deal is estimated to be worth $11.2bn, reported Bloomberg.
As per the terms of the agreement, WestRock common stockholders will receive one new Smurfit WestRock share and $5 in cash for each share of WestRock common stock.
This takes the total consideration that WestRock shareholders would receive being equivalent to $43.51 per WestRock share, based on the share price of Smurfit Kappa’s ordinary shares as of 11 September this year.
Upon the completion of this deal, Smurfit Kappa shareholders will own approximately 50.4% of the new holding company of Smurfit WestRock while WestRock’s shareholders will own the remaining 49.6%.
The deal is now subject to the fulfilment of various closing conditions and customary regulatory approvals.
It is scheduled to be completed in the second quarter (Q2) of 2024.
An extension leeway of up to six months from the given deadline will be provided if either company fails to obtain the required regulatory approvals.
WestRock CEO David Sewell said: “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.”
The announcement comes a few days after the two companies entered into advanced discussions for the potential merger.
Smurfit WestRock will have its headquarters established in Dublin, the Republic of Ireland.
According to GlobalData business fundamentals analyst Benher Gracio, the merger is projected to result in the “emergence of a top global paper and packaging player”.
Smurfit Kappa CEO Tony Smurfit added: “This incredibly exciting coming together of our two great companies is a defining moment within the global packaging industry.
“Smurfit WestRock will be the ‘go-to’ packaging partner of choice for customers, employees and shareholders.”
