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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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Paper packaging giants Smurfit and WestRock are in merger talks

Consolidation is a constant in the paper industry.

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

Mergers and acquisitions

Irish paper packaging firm Smurfit Kappa said it&#x27;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.

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Paper packaging giants Smurfit and WestRock are in merger talks

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