Smurfit Kappa is based in Ballymount
Shares in packaging giant Smurfit Kappa jump by 4.7% in Dublin
SHARES for packaging giant Smurfit Kappa jumped by as much as 4.7 per cent in Dublin this week.
It follows a proposed merger between the group and US cardboard box-maker WestRock, which is on track to be included in S&P Dow Jones indices after the deal goes through in July.
The company, whose Ballymount premises is their packaging head office, saw revenues and profits decline in the first three months of the year but pointed to an improvement in demand for boxes.
Subject to shareholder approval, the acquisition of US packaging rival WestRock would create the world’s largest box-maker.
S&P Dow Jones said that for index implementation purposes WestRock will be considered the surviving merged entity as the two companies come together in a €23.3bn deal to form Smurfit WestRock. This is in spite of the fact that Smurfit Kappa is technically acquiring WestRock.
The transaction is on track to close on July 5 and will see Smurfit WestRock drop its Irish stock market quotation and move its main listing from London to New York
WestRock is already on the S&P 500. S&P cautioned in its statement, which was issued late on Tuesday in New York, that the plan to include Smurfit WestRock is “only a preliminary announcement”, so it may be subject to change.
Shareholders in Smurfit Kappa and WestRock approved the development at separate meetings this week in Dublin and Atlanta, Georgia.
Trading of Smurfit Kappa shares in Dublin will cease at the close of business on July 2, before the merger is completed.
It will end the first Irish multinational group’s association with the exchange that stretches back 60 years, except for a period in the noughties when it was in the hands of private equity.
The WestRock deal is essentially a takeover by Smurfit Kappa that will see its shareholders own 50.4 per cent of the enlarged group, which will remain headquartered in Dublin. Smurfit Kappa chief executive Tony Smurfit and its chief financial officer, Ken Bowles, will run the new group.
