Rock-Tenn Company has collaborated with US-based global packaging company MeadWestvaco Corporation (MWV) to create a combined company of packaging (NewCo) in a transaction with an equity value of $16 billion.
Under the terms of the agreement, MWV stockholders will receive 0.78 shares of NewCo for each share of MWV held while RockTenn shareholders will be entitled to receive either 1.00 shares of NewCo or cash in an equal amount of the volume weighted average price of RockTenn common stock during a five-day period.
RockTenn chief executive officer Steven C. Voorhees said, "This transaction brings together two highly complementary organizations to create a new, more powerful company with leadership positions in the global consumer and corrugated packaging markets."
MWV junior chairman and chief executive officer John A. Luke said, "This transaction is a logical step that is borne of our strategic progress and financial success, and it offers MWV shareholders both immediate value and the opportunity to participate in significant upside as the new company generates substantial growth from its market-focused global strategy."
Subject to receipt of certain regulatory approvals and other customary closing conditions, the transaction requires the approval of interest from both MWV and RockTenn.
Both the companies target on closing the transaction in the second quarter of 2015.
