There are plenty of mega-mergers in the world of business, and the printing industry has seen its share of these combinations. However, there aren’t that many billion-dollar companies in the printing field, and to see two billion-dollar mergers on the packaging side within a one-month period is unusual, to say the least.
   
These two deals Rock-Tenn Company and MeadWestvaco Corporation (MWV) combining their companies and Ball acquiring Rexam, are creating global packaging companies that, once their respective deals are completed, will be the second- and third-largest packaging companies in the world.
 
There are also differences between the deals. Ball is buying Rexam outright, and these two companies are highly focused on the can market. MWV and RockTenn will be evenly split between consumer and corrugated packaging.
 
These mergers can have large ramifications on the ink suppliers, although it remains to be seen if this will be the case.
 
Rock-Tenn and MeadWestvaco announced on Jan. 26, 2015 that they entered into a definitive combination agreement, which will form a company with combined net sales of $15.7 billion and adjusted EBITDA of $2.9 billion.
   
This new company, which the two industrial giants are calling NewCo, will be the second-largest player in the fields of consumer and corrugated packaging, behind International Paper, whose sales are $23.5 billion.
   
RockTenn is the fifth-largest packaging company, with 2014 sales of $9.9 billion. MWV was 14^th, with $5.6 billion in sales. MWV was more focused on consumer packaging (78% of its sales), while RockTenn was centered more on corrugated (72% of sales). The new company will be roughly a 50-50 split between the two markets.
   
MWV shareholders will own 50.1% of NewCo, while RockTenn shareholders will hold 49.9%. The reason for this is apparently tax-related, as MWV had announced previously that it was selling off its specialty chemical business, including its ink resins segment.
 
 Steven C. Voorhees, CEO of RockTenn, will serve as CEO and president of NewCo, and John A. Luke, Jr., chairman and CEO of MWV, will become non-executive chairman of the board of directors. The composition of the board will be eight directors from RockTenn and six directors from MWV.
 
The company will have its principal executive offices in Richmond, VA, MVC’s HQ, and operating offices in Norcross, GA, where RockTenn was located. NewCo will have approximately 300 locations overall.
   
This is what Voorhees had to say about the merger: “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.”
 
 Luke added this comment: “We are creating the leading global provider of consumer and corrugated packaging solutions – and generating significant value for both companies.”
 
The transaction requires the approval of shareholders of both MWV and RockTenn and is subject to receipt of certain regulatory approvals and other customary closing conditions. Closing is targeted for the second calendar quarter of this year.
 
Ball Corporation’s acquisition of Rexam PLC, which was announced Feb. 19, is another huge combination within the global packaging industry, although it is centered on the metal beverage packaging market.
 
At the time of the announcement, Ball, Broomfield, CO, was the eighth-largest player in the packaging field, with sales of more than $8.5 billion. Headquartered in London, Rexam was 11^th, with sales of $5.6 billion. The combined company will reportedly have 2014 revenue of approximately $15 billion and approximately 22,500 employees across five continents.
 
John A. Hayes, chairman, president and CEO of Ball, had this to say about acquiring Rexam: “The combination of Ball and Rexam creates a global metal beverage packaging supplier capable of leveraging its geographic presence, innovative products and talented employees to better serve customers of all sizes across the globe; while at the same time generating significant shareholder value. As our customers’ global reach and product portfolios expand and consumer packaging preferences evolve, the Ball and Rexam combination allows us to remain competitive versus other packaging substrates and responsive to our stakeholders needs for sustainable, innovative and low-cost packaging solutions.”
 
As is the case of the RockTenn-MWV transaction, the Ball-Rexam deal is subject to approvals from each company’s shareholders and regulatory approvals. The first half of 2016 is the targeted date for closing the deal.
 
Once these mergers are completed, Stora Enso will fall to fourth in the packaging field, with Amcor fifth. Smurfit Kappa, Crown Cork, Sealed Air, Mondi and Owens Illinois would round out the top 10. D.S. Smith, Packaging Corporation of America, Bemis, Sonoco, Tetra Pak and Graphic Packaging are among the other major players in the field. The packaging field is a fragmented business, much like the ink industry, and with these two consolidations gong through the process of being approved, it is likely that more mergers will be discussed.