RockTenn, a provider of packaging options and a manufacturer of containerboard and paperboard, and MeadWestvaco, a packaging company that provides options to brands in the healthcare, beauty and personal care, food, beverage, home and garden, tobacco and agricultural industries, have agreed a merger that will create a ‘more powerful company with leadership positions in the global consumer and corrugated packaging markets’.
Under the terms of the agreement, the ownership of the new company, which is to be named before the transaction closes and will have combined net sales of 15.7 billion USD, will be split between MeadWestvaco (50.1 percent) and RockTenn (49.9 percent) shareholders.
The transaction is due to close in the second calendar quarter of 2015.
Steven C. Voorhees, currently chief executive officer (CEO) of RockTenn and who will fulfill the same role with the merged business, said: ‘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.
‘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.’
John A. Luke, Jr, currently chairman and CEO of MeadWestvavo and to become non-executive chairman of the board of the merged business, said: ‘We are creating the leading global provider of consumer and corrugated packaging solutions – and generating significant value for both companies' shareholders.
‘This transaction is a logical step that is borne of our strategic progress and financial success, and it offers MeadWestvaco 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.’
As well as new positions for Voorhees and Luke, RockTenn and MeadWestvaco have named the full executive leadership team of the merged business, details of which can be read here.