Smurfit Kappa in talks to merge with US paper company WestRock

The Group also noted its "Unparalleled geographic reach" across 42 countries with a "significant presence" across both Europe and the Americas

Irish packaging group, Smurfit Kappa has confirmed its discussions to merge with US paper company WestRock. 

The company confirmed this morning that the boards of both firms were in talks to create Smurfit WestRock, with plans for the new company to be incorporated and domiciled in Ireland with global headquarters in Dublin, while its North and South American operations would be headquartered in Atlanta, Georgia. 

The Irish packaging group said the potential merger could create a global packaging giant, adding that both companies share "complementary portfolios" across their products and capabilities.

The Group also noted its "unparalleled geographic reach" across 42 countries with a "significant presence" across both Europe and the Americas.

Combined, revenue in the last twelve months reflects around $34bn (€31.2bn), while adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) were around $5.5bn (€5.13bn). The group also added that both companies have "strong cash flows for future growth and capital returns."

In addition, Smurfit Kappa said that the combined group could have pre-tax run-rate cost synergies of over $400m (€373.2m) at the end of the first full year after the deal is completed.

The group also anticipates one-off cast costs of approximately $235m (€219.3) to be incurred ahead of the delivery of these synergies.

Smurfit Kappa added that the merger would also create a company with around 100,000 employees, up significantly from the group's current employee base of more than 47,000.

If the potential merger was completed, Smurfit WestRock’s ordinary shares would be listed on the New York Stock Exchange, with the Irish packaging group de-listing from Euronext Dublin. It would also seek US equity index inclusion as soon as possible.

Smurfit Kappa’s premium listing on the London Stock Exchange is also expected to be cancelled and the combined group is expected to list on the standard listing segment.

Discussions between both companies remain ongoing.