Current Temp 66.0 °F
Wind : Northwest at 15.0 MPH (13 KT)
Humidity : 73 %
Pressure : 1015.3 mb
RockTenn acquires Smurfit-Stone Container Corporation
NEW HARTFORD, N.Y. (WKTV) - Smurfit Stone in New Hartford has been acquired by another company, which officials believe will make them a leader in the paperboard packaging market.
RockTenn and Smurfit-Stone Container Corporation announced that the Boards of Directors of both companies have approved a definitive agreement under which Smurfit-Stone will become a wholly owned subsidiary of RockTenn.
The price offered consisted of 50% cash and 50% RockTenn stock, which is valued at $35 per-share of Smurfit-Stone common stock, and represents a 27% premium to Smurfit-Stone's closing stock price on January 21, 2011.
The aggregate equity value of the transaction, based on the closing price of RockTenn's common stock on January 21, 2011, is approximately $3.5 billion.
The transaction was unanimously approved by the Boards of Directors of both companies, which company officials say will create a $9 billion leader in the North American paperboard packaging market. Upon closing, RockTenn will maintain its headquarters in Norcross, GA.
Smurfit-Stone is one of the industry's leading integrated containerboard and corrugated packaging producers and one of the world's largest paper recyclers. Smurfit-Stone has manufacturing mill capacity of 7.0 million tons, and when combined, RockTenn will have 9.4 million tons of total production capacity, including 7.5 million tons of mill production in the attractive containerboard market.
RockTenn's Chairman and Chief Executive Officer, James A. Rubright said, "RockTenn's acquisition of Smurfit-Stone is another major step in our transformation of RockTenn to be the most respected company in our business with a laser focus on exceeding our customers' expectations and creating long term shareholder value. The containerboard and corrugated packaging industry is a very good business and U.S. virgin containerboard is a highly strategic global asset. With this acquisition, RockTenn's fiber input ratio will be 55% virgin and 45% recycled. We believe this transaction provides the greatest possible career opportunities for our co-workers from both companies."
Smurfit-Stone's Chief Executive Officer Patrick J. Moore said, "The Smurfit-Stone management team and the board of directors are sharply focused on creating value for shareholders. This transaction immediately achieves this objective, creating a stronger combined company that is well positioned to deliver long-term value to shareholders and high-quality, innovative packaging solutions to its valued customers."