RockTenn, Smurfit combine to form paper-recycling giant

The boards of directors at RockTenn Co. (Norcross, GA) and Smurfit-Stone Container Corp. (St. Louis, MO) have approved an agreement under which RockTenn will acquire Smurfit-Stone in a cash and stock transaction valued at approximately $3.5 billion. Under the terms of the deal, Smurfit-Stone shareholders will receive 0.30605 shares of RockTenn common stock and $17.50 in cash for each of their Smurfit-Stone shares. The transaction represents an offer of $35 per Smurfit-Stone common share, a 27% premium over the stock’s closing price on January 21. The combination of the two companies will create a $9 billion giant in the paper recycling and packaging market, ranking at number two in containerboard and coated recycled board production in North America. “The containerboard and corrugated packaging industry is a very good business, and U.S. virgin containerboard is a highly strategic global asset,” said James Rubright, RockTenn’s chairman and CEO. “With this acquisition, RockTenn’s fiber input ratio will be 55% virgin and 45% recycled.”