A major Tacoma employer, the former Simpson Tacoma Kraft paper mill, is likely to have a new name on the door this summer after its new owner, RockTenn Co., announced a merger Monday.
RockTenn, which acquired the mill just last May from Simpson, announced it intends to merge with MeadWestvaco Corp. to form a yet unnamed company to produce paper and corrugated cardboard for consumer and industrial packaging.
The merger’s total equity value is nearly $16 billion. The combined company with operations in 30 countries is expected to generate annual sales in excess of $15.7 billion.
The two companies said they expect to generate savings of
$300 million because of efficiencies created by the combination of the two.
Steven C. Voorhees, chief executive officer of RockTenn, said, “This transaction brings together two highly complementary organizations to create a new, more powerful company with leadership positions in the global consumer and corrugated packaging markets.”
The Tacoma mill is one of a very few assets either company has in the Western United States. MeadWestvaco, otherwise known as MWV, has extensive operations in the Southeastern U.S., in Europe, Asia and Brazil but no plants west of Wichita in the United States. RockTenn last year reported it employed 422 workers in Tacoma.
When RockTenn bought the Tacoma mill, it said that one of the reasons it did so was to serve customers in the West. RockTenn’s operations were concentrated in the Southeast and Midwest.
RockTenn spokeswoman Robin Keegan said the merger was still in its infant stages so it was too early to comment on the specific plans for individual operations.
“We haven’t even named our leadership team yet,” she said. “At this point, we’re very, very early in the process.”
RockTenn employees learned of the merger in emails sent out early Monday.
RockTenn had promised to invest $60 million in the mill when it bought it last year.
The merged company is expected to choose a new name before the deal closes in the second quarter of this year, the two companies said.
Simpson recently announced it also is selling most of its sawmill operations, including a mill on the Tacoma Tideflats adjacent to the paper mill to Interfor Corp. of Canada. Privately held Simpson is not selling its mill in Shelton or its door plant in McCleary.
Vorhees will serve as president and chief executive officer of the combined company. MWV Chairman and Chief Executive Officer John Luke will be the nonexecutive chairman of the merged company’s board. The company’s headquarters will be in Richmond, Virginia, where MWV has its headquarters. RockTenn’s headquarters in Norcross, Georgia, near Atlanta, will become the company’s operational hub.