WestRock (WRK) -) shares powered higher after the paper-packaging group agreed to a $20 billion merger with Ireland's Smurfit Kappa.
The deal, which comes just weeks after the two groups agreed to merger talks, creates the world's biggest packaging company – to be named Smurfit WestRock
The deal comes as e-commerce and online sales have created surging global demand for paper, corrugated cardboard and shipping materials.
WestRock holders will get around $43.51 for each of their shares, made up of one share of the new group plus $5 cash. That works out to a 36.5% premium to WestRock's closing price on Sept. 6, the day before talks between the two companies were made public.
The newly combined group will be based in Dublin but listed on the New York Stock Exchange.
“We look forward to working with Smurfit Kappa to build a leading global platform that harnesses the strength of WestRock’s consumer portfolio, presents a truly comprehensive offering of packaging solutions for customers and delivers meaningful value to our shareholders today and into the future," WestRock Chief Executive David Sewell said in a statement.
"Smurfit Kappa shares our deep commitment to innovation across the packaging lifecycle, and we are confident that Smurfit WestRock will continue to lead the industry forward," he added.
WestRock shares at last check were trading 3.5% higher at $35.26. The shares finished trading in 2022 at $35.16.
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