MWV and RockTenn to merge
With a combined value of $16 billion, packaging giants Rock-Tenn Company and MeadWestvaco Corporation (MWV) announced they have entered into an agreement to merge, creating a global provider of consumer and corrugated packaging solutions.
“This transaction brings together two highly complementary organizations to create a new, more powerful company with leadership positions in the global consumer and corrugated packaging markets,” said Steven Voohees, CEO of RockTenn. “This is a terrific opportunity for shareholders, employees and customers of both companies, all of whom stand to benefit enormously from the combination. Importantly, our two companies are also an exceptional cultural fit, sharing a commitment to exceeding customer expectations and a focus on developing innovative packaging solutions. Planning for the integration of these two companies has already started and we expect to expeditiously realize the full value of cost synergies we have identified.”
RockTenn is a provider of packaging solutions and manufacturer of containerboard and paperboard. The company employs 27,000 people with operations in the US, Canada, Mexico, Chile and Argentina.
Under the terms of the agreement, MWV stockholders will receive 0.78 shares of the new company, which has yet to be named, for each share of MWV held. RockTenn shareholders will be entitled to elect to receive either (a) 1.00 shares of the new company or (b) cash in an amount equal to the volume weighted average price of RockTenn common stock during a five-day period ending three trading days prior to closing for each share of RockTenn held.
According to the companies, total annual synergies of $300 million will be achieved over three years.
“We are creating the leading global provider of consumer and corrugated packaging solutions – and generating significant value for both companies’ shareholders,” said John Luke Jr., chairman and CEO of MWV. “This transaction is a logical step that is borne of our strategic progress and financial success, and it offers MWV shareholders both immediate value and the opportunity to participate in significant upside as the new company generates substantial growth from its market-focused global strategy.”
Headquartered in Virginia, MeadWestvaco is a global packaging company that serves the food and beverage industry among others. The company has a network of 125 facilities and 15,000 employees spanning North America, South America, Europe and Asia.
The transaction is expected to close in the second quarter of 2015 and must be approved by shareholders of MWV and RockTenn.
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