MWV and RockTenn merge to create $16 bn packaging firm

Rock-Tenn Company (RockTenn) and MeadWestvaco Corporation (MWV) have entered into a definitive combination agreement to create a leading global provider of consumer and corrugated packaging (NewCo) in a transaction with a combined equity value of $16 billion. The combined company will have combined net sales of $15.7 billion and adjusted EBITDA of $2.9 billion, including the impact of $300 million in estimated annual synergies to be achieved over three years.
 
Under the terms of the agreement, MWV and RockTenn will own 50.1% and 49.9%, respectively, in the new company. This targeted ownership ratio of NewCo will facilitate the continued favorable tax attributes of the previously announced spin-off of MWV’s specialty chemicals business, which the parties intend to complete after the closing of the business combination.
 
Steven Voorhees, chief executive officer of RockTenn, said, “This transaction brings together two highly complementary organisations to create a new, more powerful company with leadership positions in the global consumer and corrugated packaging markets.”
 
John Luke, Jr, chairman and chief executive officer of MWV, said, “We are creating the leading global provider of consumer and corrugated packaging solutions – and generating significant value for both companies’ shareholders.”
 
Voorhees will serve as chief executive officer and president of the combined company, and Luke will become non-executive chairman of the board of directors.
 
The transaction requires the approval of shareholders of both MWV and RockTenn and is subject to receipt of certain regulatory approvals and other customary closing conditions. Both parties target closing the transaction in the second calendar quarter of this year.
 
RockTenn is one of North America's leading providers of packaging solutions and manufacturers of containerboard and paperboard. The company operates locations in the US, Canada, Mexico, Chile and Argentina.
 
MeadWestvaco Corporation is a global packaging company providing innovative solutions to the world’s leading brands in the healthcare, beauty and personal care, food, beverage, home and garden, tobacco, and agricultural industries.