Sep 7, 2023 - Economy

Paper packaging giants Smurfit and WestRock are in merger talks

Illustration of a conveyor belt in the shape of a dollar sign.

Illustration: Allie Carl/Axios

Irish paper packaging firm Smurfit Kappa said it's in talks to merge with Atlanta-based rival WestRock.

Why it matters: This would create a $20 billion global giant, with $34 billion in combined revenue.

Details: No financial terms were disclosed, but Smurfit said the combined company would be called Smurfit WestRock, headquartered in Dublin and listed on the NYSE.

  • WSJ broke news of the talks, which forced Smurfit's hand and caused it to issue the public statement. A formal deal announcement could come soon.

The bottom line: Consolidation is a constant in the paper industry, as neither Smurfit nor WestRock are strangers to M&A. And there are some secular tailwinds, as more consumers demand alternatives to plastics.

  • But there also is urgency. When the pandemic was raging, paperboard prices and usage skyrocketed. Now those trends have slowed or even reversed, putting new pressure on providers.
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