MWV and RockTenn To Combine Creating Global Packaging Leader

27 Jan 2015 --- Rock-Tenn Company RockTenn and MeadWestvaco Corporation MWV have announced that they have entered into a definitive combination agreement to create a leading global provider of consumer and corrugated packaging (NewCo) in a transaction with a combined equity value of $16 billion.

The combined company, to be named prior to closing, will have combined net sales of $15.7 billion and adjusted EBITDA of $2.9 billion, including the impact of $300 million in estimated annual synergies to be achieved over three years.

Under the terms of the agreement, which has been unanimously approved by the boards of directors of both companies, MWV stockholders will receive 0.78 shares of NewCo for each share of MWV held. RockTenn shareholders will be entitled to elect to receive either (a) 1.00 shares of NewCo or (b) 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 C. Voorhees, chief executive officer of RockTenn, said, “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.”

John A. Luke, Jr., chairman and chief executive officer of MWV, said, “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.”

Mr. Voorhees will serve as chief executive officer and president of the combined company, and Mr. Luke will become non-executive chairman of the board of directors. The board will be comprised of eight directors from RockTenn and six directors from MWV. Other key executives and their positions will be determined according to their strengths and will be named prior to closing. The combined company will maintain its principal executive offices in Richmond, Va., and will have operating offices in Norcross, Ga.

The transaction requires the approval of shareholders of both MWV and RockTenn and is subject to receipt of certain regulatory approvals and other customary closing conditions. Both parties target closing the transaction in the second calendar quarter of this year.

In separate news releases, MWV and RockTenn both reported earnings for the most recent quarter ended December 31, 2014.