rocktenn co. and meadwestvaco corp. have entered into a definitive combination agreement to create a leading global provider of consumer and corrugated packaging &ldquonewco&rdquo in a transaction with a combined equity value of 16 billion. the combined company, to be named prior to closing, will have combined net sales of 15.7 billion and adjusted ebitda of 2.9 billion, including the impact of 300 million in estimated annual synergies to be achieved over three years.under the terms of the agreement, which has been unanimously approved by the boards of directors of both companies, mwv stockholders will receive 0.78 shares of newco for each share of mwv held. rocktenn shareholders will be entitled to elect to receive either a 1.00 shares of newco or b cash in an amount equal to the volume weighted average price of rocktenn common stock during a fiveday period ending three trading days prior to closing for each share of rocktenn held. the cash and stock elections by rocktenn shareholders will be subject to proration such that the resulting ownership of newco will be approximately 50.1 by mwv shareholders and 49.9 by rocktenn shareholders, and based on the shares outstanding today, approximately 7 of rocktenn shares will receive cash in lieu of stock. this targeted ownership ratio of newco will facilitate the continued favorable tax attributes of the previously announced spinoff of mwv&rsquos specialty chemicals business, which the parties intend to complete after the closing of the business combination. steven c. voorhees, ceo of rocktenn, said, &ldquothis 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. this is a terrific opportunity for shareholders, employees and customers of both companies, all of whom stand to benefit enormously from the combination. importantly, our two companies are also an exceptional cultural fit, sharing a commitment to exceeding customer expectations and a focus on developing innovative packaging solutions. planning for the integration of these two companies has already started and we expect to expeditiously realize the full value of cost synergies we have identified.&rdquojohn a. luke, jr., chairman and ceo of mwv, said, &ldquowe are creating the leading global provider of consumer and corrugated packaging solutions &ndash and generating significant value for both companies&rsquo shareholders. this transaction is a logical step that is borne of our strategic progress and financial success, and it offers mwv shareholders both immediate value and the opportunity to participate in significant upside as the new company generates substantial growth from its marketfocused global strategy.&rdquovoorhees will serve as ceo and president of the combined company, and luke will become nonexecutive chairman of the board of directors. the board will be comprised of eight directors from rocktenn and six directors from mwv. other key executives and their positions will be determined according to their strengths and will be named prior to closing. the combined company will maintain its principal executive offices in richmond, va, and will have operating offices in norcross, ga.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. both parties target closing the transaction in the second calendar quarter of this year.in separate news releases, mwv and rocktenn both reported earnings for the most recent quarter ended december 31, 2014.about rocktennrocktenn is one of north america&39s leading providers of packaging solutions and manufacturers of containerboard and paperboard. rocktenn&39s 27,000 employees are committed to exceeding their customers&39 expectations every time. the company operates locations in the united states, canada, mexico, chile and argentina. for more information, visit www.rocktenn.com about mwvmeadwestvaco corp. is a global packaging company providing innovative solutions to the world&rsquos most admired brands in the healthcare, beauty and personal care, food, beverage, home and garden, tobacco, and agricultural industries. the company also produces specialty chemicals for the automotive, energy, and infrastructure industries and maximizes the value of its development land holdings. mwv&rsquos network of 125 facilities and 15,000 employees spans north america, south america, europe and asia. learn more at www.mwv.com
