SEATTLE (Scrap Monster): Smurfit Kappa is in discussions to merge with U.S. rival WestRock (WRK.N), the Irish firm said on Thursday, in a tie-up of two of the world's largest paper and packaging producers.
The combined entity would be named Smurfit WestRock and domiciled in Ireland with its global headquarters in Dublin, Smurfit said in a statement. It would be listed on the New York Stock Exchange.
It did not disclose the possible financial terms of a deal and said definitive terms would be set out in a further announcement. Any deal would be subject to shareholder approval, due diligence and regulatory approval, it said.
WestRock shareholders would receive shares in the combined group, Smurfit Kappa said. Smurfit Kappa's Irish-listed shares were down 2.16% at 0900 GMT.
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 U.S.
At current market prices, the combined market capital of the two firms would be around $19 billion. They had combined revenue of $34 billion in the 12 months to the end of June.
Research analysts at Credit Suisse said the proposed combination had significant strategic and operational merits and strengthens the company's Americas presence, especially in faster-growing Central America.
The merger would be "a good cultural fit" with a strong focus on an innovation-driven expansion of the group's sustainable packaging business, they said in a research note.
The combined entity, which would have around 100,000 employees, could log pre-tax cost savings of more than $400 million on an annual run-rate basis at the end of the first year following the completion of the deal, said Smurfit.
The tie-up would require one-off cash costs of approximately $235 million, it added.
The deal would offer "complementary portfolios with unique product diversity and innovative sustainability capabilities, with breadth and depth across renewable, recyclable and biodegradable packaging solutions", the Smurfit statement said.
Courtesy: www.reuters.com
Copper Scrap View All | |
Alternator | 0.38 (-0.02) |
#1 Copper Bare Bright | 4.05 (-0.22) |
Aluminum Scrap View All | |
356 Aluminum Wheels (Clean) | 0.78 (-0.02) |
6061 Extrusions | 0.68 (-0.02) |
Steel Scrap View All | |
#1 Bundle | 370.00 (0) |
#1 Busheling | 390.00 (0) |
Electronics Scrap View All |