Foods firm RockTenn to buy Smurfit-Stone for $3.5-bn

RockTenn Co, North America's leading manufacturer of packaging for food and consumer products, yesterday said that it will buy its bankruptcy emerged rival Smurfit-Stone Container Corporation, for $3.5 billion in cash and stock.

The strategic transaction, approved by the boards of directors of both companies, will create a $9 billion company in the North American paperboard packaging market.

RockTenn, founded in 1936 and based in Georgia, is one of North America's leading manufacturers of paperboard, containerboard and consumer and corrugated packaging, with annual net sales of $3 billion.

With 10,400 employees, RockTenn operates in the US, Canada, Mexico, Chile and Argentina.

Missouri and Chicago-based Smurfit-Stone is one of the industry's leading integrated containerboard and corrugated packaging producers and one of the world's largest paper recyclers.

Smurfit-Stone, which generated sales of $6.3 billion in 2010 and with market capitalization of about $2.52 billion, had emerged from bankruptcy in June last year after it was weighed down with more than $4 billion debt stemming out from past acquisitions and high level of operating costs.