The president of the union representing WestRock employees expects the merger with Ireland-based Smurfit Kappa to be seamless.
"Usually an acquisition or merger in the paper industry is a cause for concern as it often results in the sale or closure of overlapping assets,” said Billy Smith, president of USW Local 9-0425. “The merger of WestRock and Smurfit Kappa is unique because the footprints of the two companies have almost no overlap. The combined assets of Smurfit Westrock will create the largest paper company in the world. We expect the transaction to be seamless for our mill and we look forward to operating under the proven leadership of the Smurfit Kappa management team."
Halifax County Economic Development Director Cathy Scott said, “The merger of Smurfit Kappa and WestRock will certainly increase the companies’ competitive position in the paper industry and underscores the long-term stability and sustainability of our local operations.”
Scott said, “The WestRock facility is a crucial economic driver in our community, and we look forward to working with company officials to maximize the potential positive outcomes for Roanoke Rapids and Halifax County as a result of the coming together of these two great companies.”
In response to a request for a comment last week on how the merger would impact the Roanoke Rapids mill, Robby Johnson, senior manager of corporate communications for WestRock said, “The merger agreement combines the operations of both Smurfit Kappa and WestRock into a new company called Smurfit WestRock. Today, we are focused on the successful completion of this merger. No discussions have taken place regarding any specific facility.”
Smurfit Kappa has not responded to a request for comment.
The Dublin, Ireland-based company Smurfit Kappa and WestRock announced the signing of a definitive transaction agreement last week.
In a press release last week, Smurfit Kappa said subject to shareholder approvals, regulatory approvals and other customary closing conditions, the combination is expected to close in the second quarter of calendar year 2024.
Under the terms of the agreement, for each share of common stock of WestRock its common stockholders will receive one new Smurfit WestRock share and $5 in cash.
Total consideration to WestRock stockholders is equivalent to $43.51 per WestRock share.
Smurfit Kappa shareholders will receive one new share for each ordinary share in Smurfit Kappa. Immediately following completion of the combination, Smurfit Kappa shareholders and WestRock stockholders are expected to own approximately 50.4 percent and 49.6 percent of Smurfit WestRock, respectively, based on the current number of shares outstanding of both Smurfit Kappa and WestRock.
The Reuters news agency reported last week that the $11 billion deal will create the world's biggest paper and packaging company and combine Europe's biggest paper and packaging producer with the second largest company in the United States. The deal will form a company worth nearly $20 billion, Reuters reported.