WestRock and Smurfit in talks over a potential merger

By:
on Sep 7, 2023
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  • Smurfit confirms that it's interested in a merger with WestRock.
  • Financial terms of a potential deal have not been disclosed yet.
  • WestRock shares opened about 10% up on the news today.

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WestRock Co (NYSE: WRK) opened 10% up this morning after Smurfit Kappa Group Plc (LON: SKG) confirmed that it was interested in a merger with the packaging company.

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Combined company will be worth about $20 billion

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The talks are ongoing but the two companies are yet to reach a definitive agreement.

But if the merger does go through, it will create about a $20 billion “global leader in sustainable packaging” that will trade only on the New York Stock Exchange.

The announcement arrives about a month after WestRock reported its financial results for the third quarter that came in shy of Street estimates. The largest transaction it has made to date was KapStone Paper and Packaging that it acquired for $5.0 billion in 2018.

Despite the gain today, shares of WestRock are still in the red year-to-date.

Financial terms of a potential deal remain unknown

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The joint company is expected to be headquartered in Dublin but operate in North and South America out of Atlanta. Financial terms of the potential merger are yet to be disclosed but the press release did say on Thursday:

Smurfit and WestRock are engaged in a mutual due diligence process … any such combination would result in WestRock shareholders receiving consideration consisting primarily of shares of the Combined Group.

Last year, revenues of both companies put together summed up to $324 billion and their combined adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) to $5.5 billion.

Shares of Smurfit Kappa Group Plc ended about 4.0% down following the news today.

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