MWV and RockTenn forming $16 billion packaging company

Rick Lingle in Supply Chain on January 27, 2015

The synergistic, “big get bigger” result of a definitive agreement between Rock-Tenn Co., Richmond, VA, and MeadWestvaco (MWV) Corp., Norcross, GA, is an as-yet-unnamed global provider of consumer and corrugated packaging with a combined equity value of $16 billion.

 

The rationale for the merger is to:

 

• Strengthen leadership in global consumer and corrugated packaging markets;

• Leverage the benefits of complementary market positions, innovation, technology, business strategies and organizational capabilities;

• Leverage the strength of the combined capabilities;

• Enhance the global footprint and increase emerging market exposure with growth platforms in North America, Europe, Brazil, India and China;

• Drive performance with best practices and economies of scale;

• Invest capital to profitably grow the business and return capital to shareholders.

 

"This transaction brings together two highly complementary organizations to create a new, more powerful company with leadership positions in the global consumer and corrugated packaging markets,” says Steven Voorhees, CEO of RockTenn. “This is a terrific opportunity for shareholders, employees and customers of both companies, all of whom stand to benefit enormously from the combination. Importantly, our two companies are also an exceptional cultural fit, sharing a commitment to exceeding customer expectations and a focus on developing innovative packaging solutions. Planning for the integration of these two companies has already started and we expect to expeditiously realize the full value of cost synergies we have identified."

 

"We are creating the leading global provider of consumer and corrugated packaging solutions—and generating significant value for both companies' shareholders,” says John Luke, Jr., chairman/CEO of MWV. “This transaction is a logical step that is borne of our strategic progress and financial success, and it offers MWV shareholders both immediate value and the opportunity to participate in significant upside as the new company generates substantial growth from its market-focused global strategy."

 

The deal is expected to close in Q2 2015.

 

A full press release can be found here.

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