Rock-Tenn Company (RKT) and MeadWestvaco Corp. (MWV) announced they have entered into a definitive combination agreement in a transaction with a combined equity value of $16 billion. MeadWestvaco stockholders will receive 0.78 shares of the combined company for each share of MWV held. RockTenn shareholders will be entitled to elect to receive either 1.00 shares of the combined company or cash in an amount equal to the volume weighted average price of RockTenn common stock during a five-day period ending three trading days prior to closing for each share of RockTenn held. The cash and stock elections by RockTenn shareholders will be subject to proration such that the resulting ownership of the combined company will be approximately 50.1% by MWV shareholders and 49.9% by RockTenn shareholders.
The combined company will have combined net sales of $15.7 billion and adjusted EBITDA of $2.9 billion, including the impact of $300 million in estimated annual synergies to be achieved over three years.
Voorhees will serve as chief executive officer and president of the combined company, and Luke will become non-executive chairman of the board. The board will be comprised of eight directors from RockTenn and six directors from MWV.
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