Smurfit US deal would paper over post-Covid downer

WestRock Co

07/09/2023 11:31

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are her own.)
    By Lisa Jucca
       MILAN, Sept 7 (Reuters Breakingviews) - Europe’s No. 1
seller of boxes used by the likes of Amazon may merge with US
peer WestRock to form a $20 bln giant. Smurfit Kappa snubbed a
similar transatlantic deal in 2018. This time, synergies offer a
logical way to offset a waning trend in pandemic-era home
deliveries.
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    CONTEXT NEWS
    Smurfit Kappa and WestRock, active in paper packaging, said
in a statement on Sept. 6 that they were discussing a potential
combination, without disclosing the financial terms.
    The prospective merger would result in the creation of a new
holding company, Smurfit WestRock, incorporated and domiciled in
Ireland, where Smurfit Kappa is currently based. The combined
group would be listed on the New York Stock Exchange.
    The combined group would have approximately $34 billion of
revenue and $5.5 billion of adjusted EBITDA based on results
from the last 12 months.
    The two groups target pre-tax annual synergies in excess of
$400 million one year after the completion of the deal.
    Shares in Smurfit Kappa were down 1.8% at 36.85 euros at
0940 GMT.

 (Editing by George Hay and Oliver Taslic)
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