NEW YORK: MeadWestvaco Corporation and RockTenn Company, Packaging companies said they would combine to form a company worth $16 billion, with MeadWestvaco shareholders owning a majority stake.
MeadWestvaco shareholders will receive 0.78 shares of the new company for each share held.
RockTenn shareholders can choose to receive either one share of the new company for each share held or a cash amount equal to the average price of RockTenn shares during a five day period ending three trading days before the deal closes.
In the new company, which will be named before the deal closes, MeadWestvaco shareholders will have a 50.1 per cent stake, while Rock Tenn shareholders will hold the rest.
Steven Voorhees, RockTenn Chief Executive will lead the new company, while MeadWestvaco CEO John Luke will become non executive chairman. The companies said MeadWestvaco will complete a previously announced spin-off of its chemicals business after the merger.
