The latest news, trends, analysis, interviews and podcasts from the global food and beverage industry

Packaging companies Smurfit Kappa and WestRock have signed a transaction agreement to create a new global packaging giant, Smurfit WestRock. The companies confirmed the decision yesterday (12 September 2023) following a previous announcement last week that they were in talks about a potential merger. Smurfit Kappa, based in Ireland, brings its expertise in corrugated and containerboard within the European market as well as large-scale pan-regional Americas presence. US-based WestRock will contribute its strong footprint in the US, Brazil and Mexico, across corrugated consumer packaging serving diverse, growing end-markets. Together, Smurfit Kappa and WestRock generated combined last 12 months’ adjusted annual revenue of approximately $34 billion as of 30 June 2023. The merger is expected to make Smurfit WestRock the largest listed global packaging partner by revenue. Smurfit WestRock will be incorporated in Ireland with its global headquarters in Dublin, while its North and South American operations will be headquartered in Atlanta, Georgia. It will employ a workforce of around 100,000 overall. Under the terms of the agreement, WestRock shareholders will receive one new Smurfit WestRock share and $5 in cash, representing a total consideration of $43.51 per share. Smurfit Kappa shareholders will receive one new share for each ordinary share in Smurfit Kappa. Following completion of the combination, Smurfit Kappa shareholders and WestRock shareholders are expected to own approximately 50.4% and 49.6% of Smurfit WestRock respectively. Subject to shareholder approvals, regulatory approvals and other customary closing conditions, the combination is expected to close in the second quarter of 2024. Tony Smurfit, Smurfit Kappa’s current CEO, will lead the new combined company as CEO. Current chair of Smurfit Kappa, Irial Finan, will be chair of Smurfit WestRock. “This incredibly exciting coming together of our two great companies is a defining moment within the global packaging industry,” CEO Tony Smurfit said. “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 in both paper and corrugated, a superb consumer and specialty packaging business, significant synergies, and enhanced scale to deliver value in the short, medium and long term.” Benher Gracio, business fundamentals analyst at GlobalData, commented on the merger: “While WestRock has a strong manufacturing presence with 145 facilities primarily concentrated in the Americas, Smurfit Kappa has over 350 facilities, with the majority of them located in 23 European countries, but with a sizeable presence in the Americas with close to 100 facilities in 13 countries". "Smurfit Kappa has also been on an expansion spree, establishing facilities in new markets like Morocco. Thus, a combined entity will have an impregnable presence in over 40 countries across the Americas and Europe, with about 500 converting facilities and over 60 mills. This is robust, given that the industry’s top player, International Paper, has just over 220 facilities and 28 mills, which will further widen the gap at the top of the pile.”