The Boards of Directors of RockTenn and Smurfit-Stone Container Corporation have approved a definitive agreement under which Smurfit-Stone will become a wholly owned subsidiary of RockTenn. The merger of the two U.S. manufacturers of paperboard, containerboard and consumer and corrugated packaging, will create a US$9 billion leader in the North American paperboard packaging market.
Smurfit-Stone is one of the industry’s leading integrated containerboard and corrugated packaging producers and one of the world’s largest paper recyclers. Smurfit-Stone has manufacturing mill capacity of 7.0 million tons, and when combined, RockTenn will have 9.4 million tons of total production capacity. The combined company will become North America’s 2nd largest producer of containerboard and 2nd largest producer of coated recycled board, and will use a balanced fibre input mix with 55% virgin fibre and 45% recycled fibre.
The transaction, consisting of 50% cash and 50% RockTenn share, is valuated at approximately US$3.5 billion, corresponding to US$35 per-share of Smurfit-Stone common share. Following the acquisition, RockTenn shareholders will own approximately 56% of the combined company and Smurfit-Stone shareholders will own 44%.
The transaction, which is subject to regulatory approvals, as well as approval by both RockTenn and Smurfit-Stone stockholders, is expected to close in the second quarter of 2011.
