RockTenn, MeadWestvaco announce merger

Rock-Tenn Co., based in Norcross, Georgia, and MeadWestvaco Corp., headquartered in Richmond, Virginia, have announced plans to merge their operations. The resulting consumer and corrugated packaging firm could be valued at $16 billion, the companies say.

The merger, announced Jan. 26, 2015, has been approved by both companies’ boards of directors and shareholders are expected to vote on the proposed merger, the companies say, with the deal to be completed by the end of the second quarter of this year. The name of the new company will be announced prior to the completion of the deal.

Under terms of the agreement, MeadWestvaco (MWV) stockholders will receive 0.78 shares of the newly formed company for each share of MWV presently held. RockTenn shareholders will be entitled to elect to receive either one share in the new company or the cash in an amount equal to the volume weighted average price of RockTenn common stock during a five-day period ending three trading days prior to closing for each share of RockTenn held.

Steven Voorhees, RockTenn CEO, says, "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. 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,” Voorhees adds.

John Luke Jr., chairman and CEO of MWV, says, "We are creating the leading global provider of consumer and corrugated packaging solutions—and generating significant value for both companies' shareholders. 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.”

Voorhees will serve as CEO and president of the combined company; Luke will become nonexecutive chairman of the board of directors. The merged company’s board of directors will comprise eight directors from RockTenn and six directors from MWV. Other key executives will be appointed and named prior to closing, the companies say. The combined company will maintain its principal executive offices in Richmond and will have operating offices in Norcross.

RockTenn operates 14 container plants, seven coated paper mills and four specialty mills. Additionally, the company operates roughly 30 recycling facilities, including trading offices in the United State and Europe. The company is operating primarily in the North American market.

MWV is more geographically diversified, with a sizable presence outside North America. The company, which has around 125 offices and facilities throughout the world, operates in 30 countries and earns about 30 percent of its revenue from emerging markets.