U.S. packaging giants MeadWestvaco (MWV) and Rock-Tenn Company have entered into an agreement to combine their businesses creating a global packaging provider of consumer and corrugated packaging solutions with a combined equity value of US$16 billion. The resulting company will have combined net sales of US$15.7 billion and adjusted EBITDA of US$2.9 billion, including the impact of US$300 million in estimated annual synergies to be achieved over three years.

Rock-Tenn is one of North America’s leading providers of packaging solutions and manufacturers of containerboard and paperboard. The company has 27,000 employees and operates locations in the United States, Canada, Mexico, Chile and Argentina.

MWV
 provides packaging solutions to a wide variety of customers, including the healthcare, beauty and personal care, food, beverage, home and garden, tobacco, and agricultural markets. MWV’s network of 125 facilities and 15,000 employees spans North America, South America, Europe and Asia. The company, which also produces specialty chemicals, recently announced its intention to spin-off this business. The operation will be completed after the closing of the merger.

"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. 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," said Steven C. Voorhees, chief executive officer of Rock-Tenn.

Mr. Voorhees will serve as chief executive officer and president of the combined company.

The operation, which is expected to close in the second calendar quarter of this year, requires the approval of shareholders of both MWV and Rock-Tenn and is subject to receipt of certain regulatory approvals.