WestRock Company (NYSE:WRK) shares are gaining in premarket trading today after the company and Smurfit Kappa Group Plc (OTC:SMFKY) said they are merging to create Smurfit WestRock, a sustainable packaging company with scale, quality, product and geographic diversity.
Under the terms of the agreement, for each share of common stock, stockholders will receive one new Smurfit WestRock share and $5.00 in cash.
Total consideration to WestRock stockholders is equivalent to $43.51 per WestRock Share, based on the closing share price of Smurfit Kappa ordinary shares on September 11, 2023.
Together, both the companies generated combined last twelve months’ adjusted annual revenue of approximately $34 billion as of June 30, 2023.
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.
After completing the combination, Smurfit WestRock’s ordinary shares will be listed on the NYSE.
Smurfit Kappa shareholders and WestRock stockholders are expected to own approximately 50.4% and 49.6% of Smurfit WestRock, respectively.
The merger is expected to close in the second quarter of calendar year 2024.
“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 WestRock CEO David Sewell.
Price Action: WRK shares are trading higher by 7.16% at $36.50 in premarket on the last check Tuesday.
