WestRock surges after $20 billion merger with package giant Smurfit Kappa

Atlanta-based WestRock has agreed to a $20 billion merger with Ireland's Smurfit Kappa that will create the world's biggest packaging and materials company.

Sep 12, 2023 - 18:30

0 46

WestRock surges after $20 billion merger with package giant Smurfit Kappa

WestRock (WRK) - Get Free Report shares powered higher in pre-market trading after the paper packaging group agreed to a $20 billion merger with Ireland's Smurfit Kappa.

The deal, which comes just weeks after the two groups agreed to merger talks, creates the world's biggest packaging company – to be named Smurfit WestRock – in an era of e-commerce and online sales that has created a surge in global demand for paper, corrugated cardboard and shipping materials.

WestRock shareholders will get around $43.51 per share for each of their holdings, divided into one share of the newly-created group and $5 in cash. That works out to a 36.5% premium to WestRock's September 6 closing price - the day before talks between the two companies were made public.

The newly-combined group will be based in Dublin but listed on the New York Stock Exchange.

“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," said CEO David Sewell.

"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," he added.

WestRock shares were marked 6.55% higher in pre-market trading to indicate an opening bell price of $36.29 each.