Ireland’s Smurfit Kappa and US rival WestRock have agreed to merge to create Smurfit WestRock, the world’s largest listed global packaging partner by revenue. The deal will combine Europe’s biggest paper and packaging producer with the second largest player in the US and forge a company worth nearly $20 billion.
The combination will enhance Smurfit Kappa’s and WestRock’s existing offerings by creating the global “Go-To” packaging partner of choice. It will bring together Smurfit Kappa’s industry-leading operational execution and innovation as a European leader in corrugated and containerboard as well as its large-scale pan-regional American presence that delivers best-in-class performance and returns; and WestRock’s leadership in the US as well as its strong footprint in Brazil and Mexico, across corrugated and consumer packaging, delivering a broad portfolio of packaging solutions serving diverse, growing end-markets.
The merger will let WestRock shareholders get one share in the new company and $5 in cash to each share they hold, equivalent to $43.51 per share. Smurfit Kappa shareholders and WestRock stockholders are expected to own approximately 50.4% and 49.6% of Smurfit WestRock, respectively, following completion of the deal, expected in the second quarter of 2024.
Smurfit Kappa CEO Tony Smurfit and Chair Irial Finan will continue to lead the new company in the same roles. A statement said that the merger will give the companies a combined adjusted core profit of $5.5 billion and revenue of around $34 billion for the year ended 30 June, making Smurfit WestRock the largest listed global packaging group by revenue. Based on previous year’s figures, analysts at JP Morgan estimates a market share of around 20% in the corrugated packaging market for the combined entity in both Europe and North America.
Smurfit WestRock will be domiciled in Ireland with its global headquarters in Dublin. Its North and South American operations will be headquartered in Atlanta, Georgia. The company will also be listed on the New York Stock Exchange (NYSE).