The confirmation by the two companies’ boards today (12 September) followed the recent announcement of a ‘possible combination’.
Irish business Smurfit Kappa and US company WestRock said they see “compelling strategic, commercial and financial rationale for combining Smurfit Kappa and WestRock’s highly complementary paper-based packaging companies to create a global leader in sustainable packaging”.
Together, Smurfit Kappa and WestRock generated combined last twelve months’ adjusted annual revenue of approximately $34bn (£27.3bn) as of 30 June 2023, which would make Smurfit WestRock the largest listed global packaging partner by revenue.
The transaction will involve the creation of a new holding company for the combined Smurfit WestRock, which will be incorporated and domiciled in Ireland with global headquarters in Dublin, and its North and South American operations will be headquartered in Atlanta, Georgia.
Subject to shareholder approvals, regulatory approvals and other customary closing conditions, the transaction is expected to close “in the second quarter of calendar year 2024”.
The boards of directors of both Smurfit Kappa and WestRock have unanimously approved the transaction and resolved to recommend that their respective shareholders vote in favour of the deal.
Tony Smurfit, CEO of Smurfit Kappa, said: “This incredibly exciting coming together of our two great companies is a defining moment within the global packaging industry. Smurfit WestRock will be the ‘Go-To’ packaging partner of choice for customers, employees, and shareholders.
“We will have the leading assets, a unique global footprint in both paper and corrugated, a superb consumer and specialty packaging business, significant synergies, and enhanced scale to deliver value in the short, medium and long term.”
David Sewell, CEO of WestRock, added: “We look forward to working with Smurfit Kappa to build a leading global platform that harnesses the strength of WestRock’s consumer portfolio, presents a truly comprehensive offering of packaging solutions for customers and delivers meaningful value to our shareholders today and into the future.
“Smurfit Kappa shares our deep commitment to innovation across the packaging lifecycle, and we are confident that Smurfit WestRock will continue to lead the industry forward. I’m grateful to WestRock’s team members, whose hard work has made this combination possible, and excited for the many opportunities that will arise from becoming part of the partner of choice in our industry.”
Smurfit WestRock will be led by Irial Finan as chair, and Tony Smurfit as CEO, with Ken Bowles as CFO. The board of Smurfit WestRock will consist of six WestRock directors and eight Smurfit Kappa directors, including Finan, Smurfit, and Bowles.
Following the completion of the deal, Smurfit WestRock’s ordinary shares will be listed on the New York Stock Exchange (NYSE) and Smurfit WestRock will seek US equity index inclusion as soon as possible thereafter.
Smurfit Kappa’s ordinary shares will be delisted from the premium segment of the Official List of the UK Financial Conduct Authority (FCA) and cancelled from admission to trading on the main market of the London Stock Exchange (LSE), and Smurfit WestRock’s ordinary shares will be listed on the standard segment of the Official List of the FCA and admitted to trading on the main market of the LSE. Smurfit Kappa will delist from Euronext Dublin.
Smurfit Kappa operates across 36 countries globally and employs 47,000 people. WestRock employs just over 50,000 staff and works in more than 30 countries.
Smurfit Kappa Group’s share price dropped by as much as 11% at one point this morning following the announcement, although by lunchtime it stood at £28.04, 8.5% lower than yesterday’s close.
