Rock-Tenn and MeadWestvaco will join forces to create a $16 billion packaging company, driving down its own costs and possibly gaining the scale to better dictate prices. The company, which had not been named as of yesterday, will have combined sales of $15.7 billion and its board will include eight directors from Rock-Tenn and six directors from MeadWestvaco. MeadWestvaco Corp. stockholders will receive 0.78 shares of the combined company for each share they own.
Rock-Tenn shareholders will be allowed to choose either 1 share of the combined company or a specific cash amount for each Rock-Tenn Co. share held. The previously announced spin-off of MeadWestvaco's specialty chemicals business will go on as planned. Rock-Tenn CEO Steven Voorhees will become CEO and John Luke, Jr., chairman and CEO of MeadWestvaco, will become non-executive chairman. The company will have its principal executive offices in Richmond, Virginia, where MeadWestvaco is based. It will have operating offices in Norcross, Georgia, where Rock-Tenn is based. Rock-Tenn has 27,000 employees and MeadWestvaco has 15,000 workers.
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