Rock-Tenn To Acquire Smurfit-Stone For $3.5B

Rock-Tenn RKT, the package and container maker, will acquire rival Smurfit-Stone Container SSCC for $3.5 billion. With annual revenue of $9 billion, the combined company will be one of the largest producers of paperboard in North America. The deal values Smurfit-Stone's common shares at $35, a 27-percent premium over Friday's closing price of $27.52, according to the Associated Press. Chicago-based Smurfit is just seven months removed from emerging from bankruptcy. Wells Fargo advised Rock-Tenn on the deal while Lazard advised Smurfit. Rock-Tenn will assume $700 million in debt and $1.1 billion in pension liabilities from Smurfit-Stone as part of the deal, the AP reported. The deal is expected to close in the second quarter. With the purchase of Smurfit, Rock-Tenn appears to be betting a recovering U.S. economy will boost demand for paper products and containers.