Smurfit Kappa and WestRock have signed a definitive transaction agreement to create Smurfit WestRock, creating a $34 billion global sustainable packaging company.
Smurfit Kappa is described as ‘Europe’s leading corrugated packaging company and one of the leading paper-based packaging companies in the world’, whilst WestRock is listed as America’s second largest packaging company which ‘works with brands and manufacturers to provide an unbeatable portfolio of paper and packaging products’. WestRock itself was created back in the middle of the last decade through the merger of MeadWestvaco and Rock-Tenn.
Together, Smurfit Kappa and WestRock generated combined adjusted annual revenue for the last 12 months of approximately $34 billion as of 30 June, 2023, which would make Smurfit WestRock the largest listed global packaging partner by revenue. In other metrics, the combined company will employ over 100,000 staff, have a presence in 42 countries with ‘significant’ reach across Europe and the Americas, and operate around 500 converting operations and 67 mills.
Positioned as a ‘global leader’ in sustainable packaging, the boards of Smurfit Kappa and WestRock see ‘compelling strategic, commercial and financial rationale’ for combining the two businesses and their complementary paper-based packaging expertise to ‘create a global leader in sustainable packaging’. This includes combining Smurfit Kappa’s position in the European corrugated and containerboard industries, as well as its large-scale pan-regional Americas presence, with WestRock’s market position in the US, Brazil and Mexico across corrugated and consumer packaging.
Smurfit WestRock will have ‘unparalleled geographic and product diversity’, it is claimed, ‘with a culturally aligned customer focus and enhanced capabilities to serve customers globally.’ Smurfit WestRock will be incorporated and domiciled in Ireland, with global headquarters in Dublin, Ireland and its North and South American operations will be headquartered in Atlanta, Georgia. The combination of the companies and creation of Smurfit WestRock is expected to close in the second quarter of the calendar year 2024.
Smurfit Kappa CEO Tony Smurfit said, ‘This incredibly exciting coming together of our two great companies is a defining moment within the global packaging industry. Smurfit WestRock will be the ‘go-to’ packaging partner of choice for customers, employees and shareholders. We will have the leading assets, a unique global footprint 0in both paper and corrugated, a superb consumer and speciality packaging business, significant synergies and enhanced scale to deliver value in the short, medium and long term.’
WestRock CEO David Sewell said, ‘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. 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.’
Irial Finan, chair of Smurfit Kappa’s board of directors, said, ‘We believe that all shareholders will benefit through ownership of a world-leading, sustainable packaging business; the combination of two of the industry’s most experienced teams with a proven track record of delivery; and, a diverse product portfolio and compelling innovation offering.’
His opposite number at WestRock, Alan Wilson, added, ‘This combination will enable WestRock to advance its key growth initiatives on a global scale while providing our shareholders with the opportunity to participate meaningfully in the combined company’s significant upside value potential.’
Smurfit WestRock will be led by Mr Finan as chair, Mr Smurfit as CEO, with Mr Bowles as CFO. The board of Smurfit WestRock will consist of six WestRock directors and eight Smurfit Kappa directors, including Messrs Finan, Smurfit and Bowles.
