Smurfit Kappa Group Plc (SKG.L), an Irish packaging firm, and WestRock Company (WRK), an American corrugated packaging company, on Tuesday announced that they have inked a merger deal to form a new holding company, Smurfit WestRock.
The merger is expected to add to Smurfit Kappa’s earnings per share in single digits on a pre-synergy basis and in excess of 20 percent including run-rate synergies by the end of the first full year of post-transaction.
Tony Smurfit, CEO of Smurfit Kappa, said: “This incredibly exciting coming together of our two great companies is a defining moment within the global packaging industry. 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.”
According to the deal, each shareholder of WestRock will receive one new Smurfit WestRock share and cash of $5. The total consideration to WestRock stockholders is equivalent to $43.51 per WestRock share, based on the closing price of Smurfit Kappa share on September 11.
Smurfit Kappa shareholders will receive one new for each share in Smurfit Kappa.
Post transaction, Smurfit Kappa and WestRock shareholders will own around 50.4 percent, and 49.6 percent of the combined company, respectively. The ownership is based on the current number of shares outstanding of both Smurfit Kappa and WestRock.
Smurfit WestRock’s shares will be listed on the LSE and NYSE. The new company will be incorporated and domiciled in Ireland with global headquarters in Dublin.
The merger allows the new company to function with around 100, 000 staff to reach across 42 countries with a significant presence across both Europe and the Americas.
Smurfit WestRock will be led by Irial Finan as Chair, Tony Smurfit as CEO, with Ken Bowles as CFO.
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