(Alliance News) - Smurfit Kappa Group PLC on Tuesday said it has signed a definitive transaction agreement with the US's WestRock Co to combine as Smurfit Westrock.
The Dublin-headquartered paper-based packaging manufacturer said the merger will create a global leader in sustainable packaging, headquartered at Smurfit's current site in Dublin.
The new company's North and South American operations will be headquartered at WestRock's base in Atlanta, Georgia.
Smurfit said the combined firm will de-list from Euronext Dublin and cancel its premium listing on the London Stock Exchange, moving to a standard listing. It will have its primary listing on the New York Stock Exchange, where WestRock is currently traded, and seek US equity index inclusion.
Smurfit is the third large Irish listing to be lost to the London Stock Exchange. CRH PLC also will move its primary listing to New York, while Kingspan Group PLC will cancel its London listing altogether and keep a primary listing on Euronext Dublin.
The firm said for each WestRock share, WestRock shareholders will receive one Smurfit WestRock share and USD5.00 in cash, while each Smurfit shareholder will receive one Smurfit Westrock share for each share in Smurfit.
It added that Smurfit shareholders will own around 50.4% of the new company, while WestRock shareholders will hold the remaining 49.6%.
The new company will have Smurfit Chair Irial Finan as its new chair and Smurfit Chief Executive Tony Smurfit as its new CEO. The board will be made up of six Smurfit directors and eight WestRock directors. It will operate 67 mills, employing 100,000 people.
Tony Smurfit 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."
WestRock shares rose 7.2% to USD36.50 in New York pre-market trading on Tuesday.
Smurfit shares sank 9.9% to 2,763.00 pence each on Tuesday morning in London.
By Harvey Dorset, Alliance News reporter
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Smurfit Kappa (SKG)
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