TIDMSKG TIDMSK3 TIDMWRK
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
THIS IS AN ANNOUNCEMENT AND NOT A CIRCULAR OR PROSPECTUS OR
EQUIVALENT DOCUMENT AND INVESTORS AND PROSPECTIVE INVESTORS SHOULD
NOT MAKE ANY INVESTMENT DECISION ON THE BASIS OF ITS CONTENTS. A
CIRCULAR AND PROSPECTUS IN RELATION TO THE TRANSACTION DESCRIBED IN
THIS ANNOUNCEMENT WILL EACH BE PUBLISHED IN DUE COURSE.
Smurfit Kappa and WestRock Announce Transaction to Create a
Global Leader in Sustainable Packaging
The "Go-To" Packaging Partner of Choice for All Stakeholders
Highlights
-- Smurfit Kappa and WestRock to combine, creating Smurfit WestRock, a
global leader in sustainable packaging with unparalleled scale, quality,
product and geographic diversity
-- Combined last twelve months' adjusted revenue and adjusted EBITDA as of
30 June 2023 of approximately $34 billion and $5.5 billion, respectively
-- Delivers attractive returns for shareholders of both companies
-- Expected to be high single digit accretive to Smurfit Kappa's earnings
per share on a pre-synergy basis and in excess of 20% including run-rate
synergies by the end of first full year following completion
-- Domiciled in Ireland with listing on the NYSE and standard listing on
the LSE, with intention to seek U.S. equity index inclusion as soon as
possible
-- Disciplined and effective capital allocation expected to deliver
improved operating efficiency and increased returns; committed to strong
investment grade credit rating
-- Smurfit WestRock will be led by Tony Smurfit as CEO and Irial Finan as
Chair
-- Unanimously recommended by the Boards of Directors of both companies
-- Companies to host a joint conference call today at 13:00 BST / 08:00 ET
to discuss transaction
Dublin, Atlanta, September 12, 2023 -- Following the
announcement of a possible combination dated 7 September 2023
("Possible Combination Announcement"), the Boards of Smurfit Kappa,
a FTSE 100 company, and WestRock, an S&P 500 company, are
pleased to announce the signing of a definitive transaction
agreement (the "Agreement") to create Smurfit WestRock, a global
leader in sustainable packaging (the "Combination" or the
"Transaction").
The Boards of Smurfit Kappa and WestRock see compelling
strategic, commercial and financial rationale for combining Smurfit
Kappa and WestRock's highly complementary paper-based packaging
companies to create a global leader in sustainable packaging. The
Combination will enhance Smurfit Kappa and WestRock's existing
offerings by creating the global "Go-To" packaging partner of
choice and bringing together:
-- Smurfit Kappa's industry-leading operational execution and innovation
as a European leader in corrugated and containerboard as well as its
large-scale pan-regional Americas presence that delivers best-in-class
performance and returns; and
-- WestRock's leadership in the United States as well as its strong
footprint in Brazil and Mexico, across corrugated and consumer packaging
delivering a broad portfolio of packaging solutions serving diverse,
growing end-markets.
Smurfit WestRock will have unparalleled geographic and product
diversity with a culturally aligned customer focus and enhanced
capabilities to serve customers globally. Together, Smurfit Kappa
and WestRock generated combined last twelve months' adjusted annual
revenue of approximately $34 billion as of 30 June 2023, which
would make Smurfit WestRock the largest listed global packaging
partner by revenue.
Terms of the Combination
The Transaction will involve the creation of a new holding
company for the combined Smurfit WestRock. Smurfit WestRock will be
incorporated and domiciled in Ireland with global headquarters in
Dublin, Ireland and its North and South American operations will be
headquartered in Atlanta, Georgia. Subject to shareholder
approvals, regulatory approvals and other customary closing
conditions, the Combination is expected to close in the second
quarter of calendar year 2024.
Under the terms of the Agreement, for each share of common stock
of WestRock (a "WestRock Share") the common stockholders of
WestRock will receive one new Smurfit WestRock share (a "New
Share") and $5.00 in cash.
This represents:
-- Total consideration to WestRock stockholders equivalent to $43.51 per
WestRock Share, based on the closing share price of Smurfit Kappa
ordinary shares on 11 September 2023, being the last closing price prior
to this announcement (and converted to U.S. Dollars using an exchange
rate of 1.075x, being the exchange rate on 11 September 2023); and
-- Combining Smurfit Kappa and WestRock on equivalent enterprise value to
adjusted EBITDA multiples.
Smurfit Kappa shareholders will receive one New Share for each
ordinary share in Smurfit Kappa. Immediately following completion
of the Combination, Smurfit Kappa shareholders and WestRock
stockholders are expected to own approximately 50.4% and 49.6% of
Smurfit WestRock, respectively, based on the current number of
shares outstanding of both Smurfit Kappa and WestRock as of the
date of this announcement.
Board Recommendations
The Boards of Directors of both Smurfit Kappa and WestRock have
unanimously approved the Transaction and resolved to recommend that
their respective shareholders vote in favour of the
Transaction.
Commenting on the Combination, Tony Smurfit, CEO of Smurfit
Kappa, said:
"This incredibly exciting coming together of our two great
companies is a defining moment within the global packaging
industry. Smurfit WestRock will be the 'Go-To' packaging partner of
choice for customers, employees and shareholders. We will have the
leading assets, a unique global footprint in both paper and
corrugated, a superb consumer and specialty packaging business,
significant synergies, and enhanced scale to deliver value in the
short, medium and long term."
Commenting on the Combination, David Sewell, CEO of WestRock,
said:
"We look forward to working with Smurfit Kappa to build a
leading global platform that harnesses the strength of WestRock's
consumer portfolio, presents a truly comprehensive offering of
packaging solutions for customers and delivers meaningful value to
our shareholders today and into the future. Smurfit Kappa shares
our deep commitment to innovation across the packaging lifecycle,
and we are confident that Smurfit WestRock will continue to lead
the industry forward. I'm grateful to WestRock's team members,
whose hard work has made this combination possible, and excited for
the many opportunities that will arise from becoming part of the
partner of choice in our industry."
Commenting on the Combination, Irial Finan, Chair of Smurfit
Kappa, said:
"We are very pleased to announce today's combination to create
Smurfit WestRock. We believe that all shareholders will benefit
through ownership of a world-leading, sustainable packaging
business; the combination of two of the industry's most experienced
teams with a proven track record of delivery; and, a diverse
product portfolio and compelling innovation offering."
Commenting on the Combination, Alan Wilson, Chair of WestRock,
said:
"This combination will enable WestRock to advance its key growth
initiatives on a global scale while providing our shareholders with
the opportunity to participate meaningfully in the combined
company's significant upside value potential."
Strategic and Operational Rationale
The Boards of Smurfit Kappa and WestRock believe the Combination
will create the global "Go-To" packaging partner of choice:
-- Combining two highly complementary portfolios to create a global leader
in sustainable packaging
-- Unparalleled geographic reach across 42 countries with a significant
presence across both Europe and the Americas
-- Complementary portfolios with unique product diversity and innovative
sustainability capabilities, with breadth and depth across renewable,
recyclable and biodegradable packaging solutions
-- Culturally aligned with strong customer focus
-- Broader opportunities for approximately 100,000 employees
-- Improved operating efficiency and increased returns across
approximately 500 converting operations and 67 mills
-- Shared sustainability ambitions for a sustainable future
-- Experienced management teams with strong track records of execution and
delivery to support global operations
-- Immediate and long-term value creation opportunity for both sets of
shareholders
Financial Rationale
The Boards of Smurfit Kappa and WestRock believe the Combination
represents a unique opportunity to create value for
stakeholders:
-- Combined last twelve months' adjusted revenue and adjusted EBITDA as of
30 June 2023 of approximately $34 billion and $5.5 billion, respectively
-- Combining Smurfit Kappa and WestRock on equivalent enterprise value to
EBITDA multiples
-- The Combination is expected to deliver high single digit accretion to
Smurfit Kappa's earnings per share on a pre-synergy basis and in excess
of 20% including run-rate synergies by the end of the first full year
following completion
-- Strong cash flows for future growth and capital returns
-- Targeting annual pre-tax run-rate synergies in excess of $400 million
at the end of the first full year following completion; delivery of
synergies expected to require one-off cash costs of approximately $235
million
-- Expected to deliver compelling benefits to Smurfit Kappa shareholders
and WestRock stockholders, with transaction structure providing the
opportunity for both sets of shareholders to participate meaningfully in
Smurfit WestRock's significant upside value potential
-- Disciplined capital allocation expected to deliver improved operating
efficiency and increased returns
-- Committed to strong investment grade credit rating
Other Key Transaction Terms
Governance and Management
Smurfit WestRock will bring together the best of both companies'
management teams to create a world class leadership team. Smurfit
WestRock will be led by Irial Finan as Chair, Tony Smurfit as CEO,
with Ken Bowles as CFO.
The Board of Smurfit WestRock will consist of 6 WestRock
Directors and 8 Smurfit Kappa Directors, including Irial Finan,
Tony Smurfit and Ken Bowles.
Listing Details
Following completion of the Combination:
-- Smurfit WestRock's ordinary shares will be listed on the New York Stock
Exchange (NYSE) and Smurfit WestRock will seek U.S. equity index
inclusion as soon as possible thereafter;
-- Smurfit Kappa's ordinary shares will be delisted from the premium
segment of the Official List of the UK Financial Conduct Authority (the
"FCA") and cancelled from admission to trading on the Main Market of the
London Stock Exchange (LSE), and Smurfit Westrock's ordinary shares will
be listed on the standard segment of the Official List of the FCA and
admitted to trading on the Main Market of the LSE;
-- Smurfit Kappa will delist from Euronext Dublin; and
-- Smurfit WestRock will be incorporated and domiciled in Ireland with
global headquarters in Dublin, Ireland and North and South American
operations headquartered in Atlanta, Georgia.
Steps to Completion
The Transaction will be effected through an Irish scheme of
arrangement involving Smurfit Kappa, and a merger of a subsidiary
with WestRock. Furthermore, given the Transaction is classified as
a Reverse Takeover under the Listing Rules of the FCA, the
publication by Smurfit Kappa of a shareholder circular, by Smurfit
WestRock of a prospectus, and approval of the Transaction by
Smurfit Kappa's shareholders are required under the Listing Rules
of the FCA. In addition, the Transaction is conditional, inter
alia, upon:
-- Approval by Smurfit Kappa shareholders of a scheme of arrangement (the
"Scheme"), which is required in order to ultimately effect the migration
of the settlement system applicable to Smurfit Kappa ordinary shares held
electronically from Euroclear Bank to the Depositary Trust Company in
connection with the listing of Smurfit WestRock's ordinary shares
directly on the NYSE and on the LSE;
-- Approval by stockholders of WestRock of the Transaction;
-- The FCA having acknowledged (and such acknowledgement having not been
withdrawn) that the application for admission of Smurfit WestRock's
ordinary shares to the standard segment of the Official List has been
approved and will become effective, and the LSE having acknowledged (and
such acknowledgement having not been withdrawn) that Smurfit WestRock's
ordinary shares will be admitted to trading on the Main Market, subject
only to the issuance of Smurfit WestRock shares upon completion of the
Transaction;
-- The registration statement for the offer of Smurfit WestRock shares
being declared effective by the SEC and the New Shares being approved for
listing on the NYSE;
-- The accuracy (subject to certain materiality standards) of the
representations and warranties made by Smurfit Kappa and WestRock in the
Agreement and material compliance by both with the covenants contained
therein;
-- Sanction of the Scheme by the Irish High Court;
-- Relevant regulatory approvals being obtained, including in the EU and
the U.S.; and
-- Other customary closing conditions.
Subject to the satisfaction of the conditions to closing, the
Transaction is expected to close in the second quarter of calendar
year 2024.
Dividend
Smurfit Kappa shareholders and WestRock stockholders will
continue to receive ordinary course dividends until the
consummation of the Combination. Smurfit WestRock intends to pay a
dividend to Smurfit WestRock stockholders in line with Smurfit
Kappa's current attractive dividend policy.
Financing
Smurfit Kappa Treasury Unlimited Company, a wholly-owned
subsidiary of Smurfit Kappa, has entered into a commitment letter
providing for a committed bridge facility with affiliates of
Citigroup Global Markets Limited ("Citi") which includes financing
to fund the cash portion of the Transaction. Smurfit Kappa expects
any drawings to be refinanced through debt capital markets or other
financing sources.
Financial Reporting
Effective from closing, Smurfit WestRock intends to report its
financial information in US GAAP with a U.S. Dollar reporting
currency.
Settlement
The settlement system applicable to the Company's ordinary
shares held electronically shall migrate from Euroclear Bank to the
Depositary Trust Company in connection with the listing of the
ordinary shares directly on the NYSE.
Transaction Agreement
Smurfit Kappa and WestRock have today entered into a transaction
agreement (the "Transaction Agreement"). Under the terms of the
Transaction Agreement, at Completion (i) Smurfit WestRock (an
Irish-incorporated holding company) will acquire the entire issued
share capital of Smurfit Kappa by means of a scheme of arrangement
under Section 450 of the Companies Act 2014 of Ireland; and (ii) a
subsidiary of Smurfit Westrock ("Merger Sub") shall be merged with
and into WestRock (the "Merger"), following which the separate
corporate existence of Merger Sub shall cease, with WestRock
continuing as the surviving corporation (the "Surviving
Corporation"), such that following the Merger, the Surviving
Corporation will be a wholly owned subsidiary of Smurfit
WestRock.
Under the terms of the Transaction Agreement, for each WestRock
Share the common stockholders of WestRock will receive one New
Share and $5.00 in cash. From and after Completion, all WestRock
Shares shall no longer be outstanding and shall automatically be
cancelled and shall cease to exist, and each applicable holder of
WestRock Shares shall cease to have any rights with respect
thereto, except the right to receive a New Share and $5.00 in cash,
and the aggregate amount of any dividends or other distributions
declared by the WestRock Board for such WestRock Shares having a
record date before, and which remain unpaid as of, Completion upon
surrender of such WestRock Shares, together with any amounts
payable under the relevant terms of the Transaction Agreement. All
WestRock shares owned by any subsidiary of WestRock, Smurfit Kappa,
Merger Sub or any of their respective subsidiaries shall be
cancelled and shall cease to exist, and no consideration shall be
delivered in exchange therefor. Each share of common stock, $0.01
par value, of Merger Sub issued and outstanding immediately prior
to Completion shall be automatically converted into and become one
fully paid and non-assessable share of common stock of the
Surviving Corporation.
Smurfit Kappa shareholders will receive one New Share for each
ordinary share in Smurfit Kappa. Immediately following Completion,
Smurfit Kappa shareholders and WestRock stockholders are expected
to own approximately 50.4% and 49.6% of Smurfit WestRock,
respectively, based on the current number of shares outstanding of
both Smurfit Kappa and WestRock as of the date of this
announcement.
The Transaction Agreement contains representations, warranties,
covenants and undertakings given by, and termination rights in
favour of, each of WestRock and Smurfit Kappa that are customary
for a transaction of this nature. Completion of the Transaction is
subject to customary regulatory approvals, including, among others,
antitrust approval in the U.S. and the EU. WestRock or Smurfit
Kappa have agreed to use their reasonable best efforts to obtain
the required regulatory approvals.
The Transaction Agreement also contains customary termination
rights. The Transaction Agreement may be terminated if Completion
has not occurred on or before 12 September, 2024, provided that
such deadline will be extended by up to six months if required
regulatory approvals have not yet been obtained. The Extraordinary
General Meeting ("EGM") and the Court Meeting ("CM") of Smurfit
Kappa shareholders, and the Special Meeting of WestRock
stockholders ("SM"), are each expected to be convened in the first
half of 2024. If either the board of directors of Smurfit Kappa or
WestRock changes its recommendation that Smurfit Kappa shareholders
or WestRock stockholders vote in favour of the Transaction
respectively, then the other party will be entitled to terminate
the Transaction Agreement and, as relevant, Smurfit Kappa will pay
a termination amount of $100 million to WestRock, or WestRock will
pay a termination amount of $147 million to Smurfit Kappa. This
termination amount is also payable if the Transaction Agreement is
terminated because Smurfit Kappa or WestRock commit a willful
breach of customary non-solicit commitments in relation to
alternative transactions (with customary exceptions in the period
up to the EGM, CM and SM), or if the Transaction Agreement is
terminated in certain circumstances following a competing proposal
for at least 50% of either Smurfit Kappa or Westrock and the
relevant party consummates or enters into an agreement for a
competing proposal within 12 months after such termination. An
amount of $50 million is payable by Smurfit Kappa if WestRock
terminates after failure by Smurfit Kappa to receive the requisite
Transaction approvals at the EGM or CM, and an amount of $57
million is payable by WestRock if Smurfit Kappa terminates after
failure by WestRock to receive the requisite Transaction approval
at the SM. Any
amount referred to in the preceding sentence paid by a party
will be credited toward any subsequent termination amount payable
by such party. Completion is expected to occur in the second
quarter of calendar year 2024.
The summary of the Transaction Agreement set out in this
announcement is a summary only and is qualified in its entirety by
reference to the full text of the Transaction Agreement, which will
be filed with the U.S. Securities and Exchange Commission.
Conference Call Details
At 13:00 BST / 08:00 ET today, Smurfit Kappa and WestRock will
host a joint conference call for analysts and institutional
investors.
The webcast will be available here.
Please allow sufficient time for registration.
The accompanying presentation will be available online on the
Investor Relations portion of Smurfit Kappa's website at:
https://www.smurfitkappa.com/us/investors.
This announcement contains Inside Information for the purposes
of Regulation (EU) No 596/2014 on Market Abuse (as onshored into UK
law by the European Union (Withdrawal) Act 2018 and the Market
Abuse Exit Regulations 2019). The person responsible for arranging
for the release of this announcement on behalf of Smurfit Kappa is
Gillian Carson-Callan, Company Secretary. The date and time of this
announcement is the same as the date and time that it has been
communicated to the media, at 7.30 am BST on 12 September 2023.
Further announcements may be made as and when appropriate.
About Smurfit Kappa
Smurfit Kappa, a FTSE 100 company, is one of the leading
providers of paper-based packaging solutions in the world, with
more than 47,000 employees in over 350 production sites across 36
countries and with revenue of EUR12.8 billion in 2022. We are
located in 22 countries in Europe, 13 in the Americas and one in
Africa. We are the only large--scale pan-regional player in Latin
America. Our products, which are 100% renewable and produced
sustainably, improve the environmental footprint of our
customers.
With our proactive team, we relentlessly use our extensive
experience and expertise, supported by our scale, to open up
opportunities for our customers. We collaborate with
forward-thinking customers by sharing superior product knowledge,
market understanding and insights in packaging trends to ensure
business success in their markets. We have an unrivalled portfolio
of paper-based packaging solutions, which is constantly updated
with our market-leading innovations.
This is enhanced through the benefits of our integration, with
optimal paper design, logistics, timeliness of service, and our
packaging plants sourcing most of their raw materials from our own
paper mills.
We have a proud tradition of supporting social, environmental
and community initiatives in the countries where we operate.
Through these projects we support the UN Sustainable Development
Goals, focusing on where we believe we have the greatest impact.
Learn more at smurfitkappa.com.
About WestRock
WestRock partners with customers to provide differentiated,
sustainable paper and packaging solutions that help them win in the
marketplace. WestRock's team members support customers around the
world from locations spanning North America, South America, Europe,
Asia and Australia. Learn more at www.westrock.com.
WestRock had gross assets of $28,149 million based on the
unaudited results for the nine months ended 30 June 2023, and
profit before tax of $1,219 million based on the audited results
for the year ended 30 September 2022.
Advisors to Smurfit Kappa
Citi is acting as lead financial advisor and sponsor to Smurfit
Kappa. PJT Partners (UK) Limited ("PJT Partners") is also acting as
financial advisor to Smurfit Kappa. Matheson LLP, Wachtell, Lipton,
Rosen & Katz and Freshfields Bruckhaus Deringer LLP are acting
as legal counsel.
Advisors to WestRock
Evercore Group L.L.C. ("Evercore") is serving as financial
advisor to the Board of Directors of WestRock, Lazard Frères &
Co. LLC ("Lazard") is serving as financial advisor to WestRock and
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Cravath,
Swaine & Moore LLP are serving as legal counsel to WestRock.
Goldman, Sachs & Co. also provided financial advice to
WestRock.
Enquiries:
Smurfit Kappa
Ciarán Potts
Head of Investor Relations
T: +353 1 202 7000
E: ir@smurfitkappa.com
WestRock
Robert Quartaro
Senior Vice President, Investor Relations
T: +1 470 328 6979
E: robert.quartaro@westrock.com
Irish Takeover Rules
On 7 September 2023, the Irish Takeover Panel, pursuant to its
powers under the Takeover Panel Act 1997 (as amended),and having
regard to the very specific circumstances of the transaction,
granted a derogation under s. 8(7) of the Irish Takeover Panel, Act
1997, from the application of the Irish Takeover Rules, 2022 (the
"Rules") in their entirety to the Scheme. The derogation is granted
on the express condition of the consummation of the Merger not
being classified as a "reverse takeover transaction" under the
Rules.
Proposed FCA Equity Listing Reforms
The listing category which Smurfit WestRock's ordinary shares
will be listed on is subject to the FCA's updated listing rules on
listing categories to be published in due course. Further
announcements on the listing category will be made following the
publication of the updated listing rules and consultation with the
FCA.
Important Additional Information
Neither this announcement nor any copy of it may be taken or
transmitted directly or indirectly into or from any jurisdiction
where to do so would constitute a violation of the relevant laws or
regulations of such jurisdiction. Any failure to comply with this
restriction may constitute a violation of such laws or regulations.
Persons into whose possession this announcement or other
information referred to herein should inform themselves about, and
observe, any restrictions in such laws or regulations.
This announcement has been prepared for the purpose of complying
with the applicable law and regulation of the United Kingdom, the
United States and Ireland and information disclosed may not be the
same as that which would have been disclosed if this announcement
had been prepared in accordance with the laws and regulations of
jurisdictions outside the United Kingdom, the United States or
Ireland.
Subject to the Market Abuse Regulation and the FCA's Disclosure
Guidance and Transparency Rules and the UK Listing Rules, the
delivery of this announcement shall not create any implication that
there has been no change in the affairs of Smurfit Kappa, WestRock
or Smurfit WestRock since the date of this announcement or that the
information in this announcement is correct as at any time
subsequent to its date.
Additional Information about the Combination and Where to Find
It
In connection with the Combination of Smurfit Kappa and
WestRock, Smurfit WestRock will file with the U.S. Securities and
Exchange Commission (the "SEC") a registration statement, which
will include a proxy statement of WestRock that will also
constitute a prospectus of Smurfit WestRock (the "proxy
statement/prospectus"). Each of Smurfit Kappa, WestRock and Smurfit
WestRock will also file other relevant documents in connection with
the Combination. The definitive proxy statement/prospectus will be
sent to the stockholders of WestRock. Smurfit Kappa will also
publish a shareholder circular approved by the FCA, which will be
sent to Smurfit Kappa's shareholders or otherwise made available in
accordance with Smurfit Kappa's articles of association and the UK
Listing Rules. Smurfit WestRock will publish a prospectus approved
by the FCA, which will be made available in accordance with Rule
3.2 of the UK Prospectus Regulation Rules (the "UK listing
prospectus"). This communication is not a substitute for any
registration statement, proxy statement/prospectus, UK listing
prospectus or other document Smurfit Kappa, WestRock and/or Smurfit
WestRock may file with the SEC or applicable securities regulators
in the United Kingdom and Ireland in connection with the
Combination. BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS,
INVESTORS, STOCKHOLDERS AND SHAREHOLDERS OF SMURFIT KAPPA AND
WESTROCK ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE
REGISTRATION STATEMENT, THE PROXY STATEMENT/PROSPECTUS, THE
SHAREHOLDER CIRCULAR AND THE UK LISTING PROSPECTUS, AS APPLICABLE,
AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED
WITH THE SEC OR APPLICABLE SECURITIES REGULATORS IN THE UNITED
KINGDOM AND IRELAND, AS WELL AS ANY AMMENTS OR SUPPLEMENTS TO THESE
DOCUMENTS, IN CONNECTION WITH THE COMBINATION WHEN THEY BECOME
AVAILABLE, AS THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION
ABOUT SMURFIT KAPPA, WESTROCK, SMURFIT WESTROCK, THE COMBINATION
AND RELATED MATTERS. The registration statement and proxy
statement/prospectus and other documents filed by Smurfit Kappa,
WestRock and Smurfit WestRock with the SEC, when filed, will be
available free of charge at the SEC's website at www.sec.gov. In
addition, investors and shareholders will be able to obtain free
copies of the proxy statement/prospectus and other documents filed
with the SEC by WestRock online at ir.westrock.com/ir-home/, upon
written request delivered to 1000 Abernathy Road, Atlanta, Georgia
or by calling (770) 448-2193, and will be able to obtain free
copies of the registration statement, proxy statement/prospectus,
shareholder circular, UK listing prospectus and other documents
which will be filed with the SEC and applicable securities
regulators in the United Kingdom and Ireland by Smurfit WestRock or
Smurfit Kappa online at www.smurfitkappa.com/investors, upon
written request delivered to Beech Hill, Clonskeagh, Dublin 4,
Ireland or by calling +353 1 202 7000. The information included on,
or accessible through, Smurfit Kappa's or WestRock's website is not
incorporated by reference into this communication.
This communication is for informational purposes only and is not
intended to, and shall not, constitute an offer to sell or buy or
the solicitation of an offer to sell or buy any securities, nor
shall there be any sale of securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
appropriate registration or qualification under the securities laws
of any such jurisdiction. No offering of securities shall be made
except by means of a prospectus meeting the requirements of Section
10 of the U.S. Securities Act of 1933, as amended.
Participants in the Solicitation of Proxies
This communication is not a solicitation of proxies in
connection with the Combination. However, under SEC rules, Smurfit
Kappa, WestRock, Smurfit WestRock, and certain of their respective
directors, executive officers and other members of the management
and employees may be deemed to be participants in the solicitation
of proxies in connection with the Combination. Information about
WestRock's directors and executive officers may be found in its
2022 Annual Report on Form 10-K filed with the SEC on November 18,
2022, available at ir.westrock.com/ir-home/ and www.sec.gov.
Information about Smurfit Kappa's directors and executive officers
may be found in its 2022 Annual Report filed with applicable
securities regulators in the United Kingdom on March 28, 2023,
available on its website at www.smurfitkappa.com/investors. These
documents can be obtained free of charge from the sources indicated
above. Additional information regarding the interests of such
potential participants in the solicitation of proxies in connection
with the Combination will be included in the proxy
statement/prospectus and other relevant materials filed with the
SEC when they become available.
Information Regarding Forward-Looking Statements
This communication contains forward-looking statements as that
term is defined in Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended by the Private Securities Litigation Reform Act of 1995.
These forward-looking statements generally include statements
regarding the Combination between Westrock and Smurfit Kappa,
including any statements regarding the Combination and the listing
of Smurfit Westrock, the rationale and expected benefits of the
Combination (including, but not limited to, synergies), and any
other statements regarding Westrock's and Smurfit Kappa's future
expectations, beliefs, plans, objectives, results of operations,
financial condition and cash flows, or future events or
performance. Forward-looking statements can sometimes be identified
by the use of forward-looking terms such as "believes," "expects,"
"may," "will," "shall," "should," "would," "could," "potential,"
"seeks," "aims, " "projects," "predicts," "is optimistic,"
"intends," "plans," "estimates," "targets," "anticipates,"
"continues" or other comparable terms or negatives of these terms
or other variations or comparable terminology or by discussions of
strategy, plans, objectives, goals, future events or intentions,
but not all forward-looking statements include such identifying
words.
Forward-looking statements are based upon current plans,
estimates and expectations that are subject to risks, uncertainties
and assumptions. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those indicated or
anticipated by such forward-looking statements. We can give no
assurance that such plans, estimates or expectations will be
achieved and therefore, actual results may differ materially from
any plans, estimates or expectations in such forward-looking
statements. Important factors that could cause actual results to
differ materially from such plans, estimates or expectations
include: a condition to the closing of the Combination may not be
satisfied; the occurrence of any event that can give rise to
termination of the Combination; a regulatory approval that may be
required for the Combination is delayed, is not obtained in a
timely manner or at all or is obtained subject to conditions that
are not anticipated; Smurfit Kappa is unable to achieve the
synergies and value creation contemplated by the Combination;
Smurfit WestRock's availability of sufficient cash to distribute to
its shareholders in line with current expectations; Smurfit Kappa
is unable to promptly and effectively integrate WestRock's
businesses; management's time and attention is diverted on issues
related to the Combination; disruption from the Combination makes
it more difficult to maintain business, contractual and operational
relationships; credit ratings decline following the Combination;
legal proceedings are instituted against Smurfit Kappa or WestRock;
Smurfit Kappa or WestRock are unable to retain or hire key
personnel; the announcement or the consummation of the Combination
has a negative effect on the market price of the capital stock of
Smurfit Kappa or WestRock or on Smurfit Kappa or WestRock's
operating results; evolving legal, regulatory and tax regimes;
changes in economic, financial, political and regulatory
conditions, in Ireland, the United Kingdom, the United States and
elsewhere, and other factors that contribute to uncertainty and
volatility, natural and man-made disasters, civil unrest, pandemics
(e.g., the coronavirus (COVID-19) pandemic (the "COVID-19
pandemic")), geopolitical uncertainty, and conditions that may
result from legislative, regulatory, trade and policy changes
associated with the current or subsequent Irish, U.S. or U.K.
administrations; the ability of Smurfit Kappa or WestRock to
successfully recover from a disaster or other business continuity
problem due to a hurricane, flood, earthquake, terrorist attack,
war, pandemic, security breach, cyber-attack, power loss,
telecommunications failure or other natural or man-made event,
including the ability to function remotely during long-term
disruptions such as the COVID-19 pandemic; the impact of public
health crises, such as pandemics (including the COVID-19 pandemic)
and epidemics and any related company or governmental policies and
actions to protect the health and safety of individuals or
governmental policies or actions to maintain the functioning of
national or global economies and markets; actions by third parties,
including government agencies; the risk that disruptions from the
Combination will harm Smurfit Kappa's or WestRock's business,
including current plans and operations; certain restrictions during
the pendency of the Combination that may impact Smurfit Kappa's or
WestRock's ability to pursue certain business opportunities or
strategic transactions; Smurfit Kappa's or WestRock's ability to
meet expectations regarding the accounting and tax treatments of
the Combination; the risks and uncertainties discussed in the
"Risks and Uncertainties" section in Smurfit Kappa's reports
available on the National Storage Mechanism at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism and on its
website at https://www.smurfitkappa.com/investors; and the risks
and uncertainties discussed in the "Risk Factors" and "Information
Regarding Forward-Looking Statements" sections in WestRock's
reports filed with the SEC. These risks, as well as other risks
associated with the Combination, will be more fully discussed in
the proxy statement/prospectus, the shareholder circular, the UK
listing prospectus and the other relevant materials filed with the
SEC and applicable securities regulators in the United Kingdom. The
list of factors presented here should not be considered to be a
complete statement of all potential risks and uncertainties.
Unlisted factors may present significant additional obstacles to
the realization of forward-looking statements. We caution you not
to place undue reliance on any of these forward-looking statements
as they are not guarantees of future performance or outcomes and
that actual performance and outcomes, including, without
limitation, the actual results of operations, financial condition
and liquidity, and the development of new markets or market
segments in which we operate, may differ materially from those made
in or suggested by the forward-looking statements contained in this
communication. Except as required by law, none of Smurfit Kappa,
WestRock or Smurfit WestRock assume any obligation to update or
revise the information contained herein, which speaks only as of
the date hereof.
Nothing in this announcement should be construed as a profit
estimate or profit forecast. No statement in this announcement,
including statements regarding the potential effect of the
Combination on cash flows and capital returns should be interpreted
to mean that cash flows or capital returns of Smurfit Kappa,
WestRock or Smurfit WestRock for the current or future financial
years will necessarily match or exceed the historical cash flows or
capital returns of Smurfit Kappa or WestRock.
Completion of the Combination will be subject to the
satisfaction of several conditions as referenced elsewhere in this
announcement. Consequently, there can be no certainty that the
completion of the Combination will be forthcoming.
This announcement is not a prospectus for the purposes of the UK
Prospectus Regulation Rules or the EU Prospectus Regulation. It has
been prepared solely for the Combination referred to in this
announcement.
The contents of this announcement are not to be construed as
legal, business or tax advice. Each shareholder should consult its
own legal adviser, financial adviser or tax adviser for legal,
financial or tax advice, respectively.
Certain figures contained in this announcement, including
financial information, have been subject to rounding adjustments.
Accordingly, in certain instances, the sum or percentage change of
the numbers contained in this announcement may not conform
precisely with the total figure given. Except as explicitly stated
in this announcement, none of the contents of Smurfit Kappa's or
WestRock's websites, nor any website accessible by hyperlinks on
Smurfit Kappa's or WestRock's websites, is incorporated in or forms
part of, this announcement.
Important Notice
Citi, which is authorised by the Prudential Regulation Authority
("PRA") and regulated in the UK by the FCA and the PRA, is acting
as financial advisor for Smurfit Kappa Group PLC and for no one
else in connection with the matters described in this Announcement,
the Transaction and will not be responsible to anyone other than
Smurfit Kappa Group PLC for providing the protections afforded to
clients of Citi nor for providing advice in connection with the
Transaction, or any other matters referred to in this announcement.
Neither Citi nor any of its affiliates, directors or employees owes
or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, consequential, whether in contract, in
tort, in delict, under statute or otherwise) to any person who is
not a client of Citi in connection with this Announcement, any
statement contained herein, the Transaction or otherwise.
Evercore, which is authorised and regulated by the Financial
Industry Regulatory Authority ("FINRA"), is acting exclusively as
financial adviser for the Board of Directors of WestRock and for no
one else in connection with the matters set out in relation to the
Transaction or any other matter referred to in this announcement
and will not regard any other person as its client in relation to
the matters set out in this announcement and will not be
responsible to anyone other than WestRock for providing the
protections afforded to clients of Evercore, nor for providing
advice in relation to the Transaction or any other matter referred
to in this announcement. Neither Evercore nor any of its affiliates
(nor their respective directors, officers, employees or agents)
owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under
statute or otherwise) to any person who is not a client of Evercore
in connection with this announcement, any statement contained
herein or otherwise.
Lazard, which is authorised and regulated by FINRA, is acting
exclusively as financial adviser for WestRock and for no one else
in connection with the matters set out in this announcement and
will not regard any other person as its client in relation to the
matters set out in this announcement and will not be responsible to
anyone other than WestRock for providing the protections afforded
to clients of Lazard nor for providing advice in relation to the
Transaction or any other matter referred to in this announcement.
Neither Lazard nor any of its affiliates (nor their respective
directors, officers, employees or agents) owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any
person who is not a client of Lazard in connection with this
announcement, any statement contained herein or otherwise.
PJT Partners (UK) Limited ("PJT Partners") which is authorised
and regulated by the Financial Conduct Authority in the United
Kingdom is acting exclusively for Smurfit Kappa and no one else in
connection with the matters described herein and will not be
responsible to anyone other than Smurfit Kappa for providing the
protections afforded to clients of PJT Partners or for providing
advice in connection with the matters described herein. Neither PJT
Partners nor any of its subsidiaries, branches or affiliates owes
or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under
statute or otherwise) to any person who is not a client of PJT
Partners in connection with this announcement, any statement
contained herein or otherwise.
Goldman Sachs & Co. LLC, which is authorised and regulated
by FINRA, is acting exclusively as financial adviser for WestRock
and for no one else in connection with the matters set out in this
announcement and will not regard any other person as its client in
relation to the matters set out in this announcement and will not
be responsible to anyone other than WestRock for providing the
protections afforded to clients of Goldman Sachs & Co. LLC nor
for providing advice in relation to the Transaction or any other
matter referred to in this announcement. Neither Goldman Sachs
& Co. LLC nor any of its affiliates (nor their respective
directors, officers, employees or agents) owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any
person who is not a client of Goldman Sachs & Co. LLC in
connection with this announcement, any statement contained herein
or otherwise.
Notes
Unless otherwise stated: financial information relating to
Smurfit Kappa has been extracted or derived from the audited
results for the twelve months ended 31 December 2022 and unaudited
results for the six months ended 30 June 2023 and financial
information relating to WestRock has been extracted or derived from
the audited results for the twelve months ended 30 September 2022,
and the unaudited results up until the third quarter ended 30 June
2023.
WestRock financials are prepared under U.S. GAAP. Smurfit Kappa
financials are prepared under IFRS as adopted by the EU and certain
adjustments have been made to prepare the estimated adjusted EBITDA
for Smurfit WestRock. This, and certain other statements, are based
on non-IFRS and non-US GAAP financial information on Smurfit Kappa
and WestRock. These statements may be subject to amendment in the
shareholder circular and UK listing prospectus.
Sources of Information and Bases of Calculation
Where figures such as adjusted Revenue and adjusted EBITDA are
referenced in this announcement, these figures are approximate and
represent estimates that are rounded to the nearest billion and/or
hundred million and/or million, where applicable.
Unless otherwise stated in this announcement:
1. Any references to Smurfit WestRock adjusted revenue are based on the
following estimates and adjustments:
1. Smurfit Kappa reported revenue of EUR12,267 million for the last
twelve months, as of 30 June 2023, and converted to U.S. Dollars
using an exchange rate of 1.047x implying an adjusted revenue of
$12,849 million; and
2. WestRock adjusted revenue of $21,044 million for the last twelve
months, as of 30 June 2023, which is based on the following pro
forma adjustments: WestRock revenue of $20,724 million,
subtracting the estimated revenue contribution from RTS Packaging
of $229 million, adding back estimated revenue contribution from
Gondi of $549 million.
-- The Smurfit WestRock adjusted revenue is calculated as the sum
of Smurfit Kappa adjusted revenue (as noted above in paragraph a))
and WestRock adjusted revenue (as noted above in paragraph b)).
2. Any references to Smurfit WestRock adjusted EBITDA are based on the
following estimates and adjustments:
1. Smurfit Kappa EBITDA of EUR2,2941 million for the last twelve
months, as of 30 June 2023, less operating lease expenses of
EUR108 million, and converted to U.S. Dollars using an exchange
rate of 1.047x, being the average exchange rate over the last
twelve months ended 30 June 2023, implying a Smurfit Kappa
adjusted EBITDA of $2,289 million; and
2. WestRock adjusted EBITDA of $3,188 million for the last twelve
months, as of 30 June 2023, which is based on the following
adjustments: WestRock consolidated adjusted EBITDA of $3,162
million, subtracting the estimated EBITDA contribution from RTS
Packaging of $37 million, and adding back estimated EBITDA
contribution from Gondi of $63 million.
3. WestRock adjusted EBITDA of $3,2022 million for the last twelve
months, as of 30 June 2023, which is based on the following
adjustments: WestRock adjusted EBITDA of $3,188 million,
subtracting the estimated EBITDA contribution from Joint Ventures
and Associates of $30 million, subtracting certain pension and
postretirement pension income of $31 million, and adding back
share-based compensation of $75 million.
-- The Smurfit WestRock adjusted EBITDA is calculated as the sum of
Smurfit Kappa adjusted EBITDA (as noted above in paragraph a)) and
WestRock adjusted EBITDA (as noted above in paragraph c)).
3. The issued and to be issued ordinary share capital of Smurfit Kappa is
based on a fully diluted share count of 264,733,319 reflecting
260,149,162 shares in issue as at the date of this announcement and
4,584,157 of dilutive share awards. The issued and to be issued ordinary
share capital of WestRock is based on a fully diluted share count of
260,365,377 reflecting 256,305,252 basic shares outstanding in issue and
4,060,125 of dilutive share awards which may be issued on or after the
date of this announcement to satisfy the exercise of stock options and
restricted and performance stock awards outstanding under the WestRock
Share Plans, estimated based on the total consideration per WestRock
share and calculated in accordance with the Treasury Stock Method.
4. The enterprise value for WestRock is based on (i) the value placed by
the Transaction on the entire issued and to be issued ordinary share
capital of WestRock (as set out in the paragraph above) (ii) plus
WestRock reported net debt of $8,712 million subtracting estimated
proceeds of $259 million resulting from the sale of RTS Packaging and the
Chattanooga mill and (iii) adding the non-redeemable minority interests
of $17 million.
5. Pro forma net debt for Smurfit WestRock based on (i) WestRock reported
net debt of $8,712 million subtracting estimated proceeds of $259 million
resulting from the sale of RTS Packaging and the Chattanooga mill (ii)
plus Smurfit Kappa reported net debt of EUR3,175 million subtracting
leases of EUR353 million converted to U.S. Dollars using an exchange rate
of 1.087x, being the end of period exchange rate as of 30 June 2023, and
(iii) adding total cash consideration of $1,302 million.
-ENDS-
(1) Difference from the EUR2,230 million in 7 September
announcement relates to share-based compensation not being
reflected in the euro-denominated EBITDA displayed. This amendment
does not impact the combined Smurfit WestRock adjusted EBITDA.
(2) Difference from the $3,228 million in 7 September
announcement relates to an amendment to the estimated EBITDA
contribution from Gondi and the subtraction of pension and
postretirement pension net income.
View source version on businesswire.com:
https://www.businesswire.com/news/home/20230911441744/en/
CONTACT:
Smurfit Kappa Group PLC
SOURCE: Smurfit Kappa Group PLC
Copyright Business Wire 2023
(END) Dow Jones Newswires
September 12, 2023 02:32 ET (06:32 GMT)
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