meadwestvaco&39s mwv recent corporate actionsincluding an announced spinoff of the specialty chemicals division and the sale of its european tobacco packaging operationssuggested to us that it was pruning itself to be acquired by or merged with another paperbased packaging company. on jan. 26, we got our answer when the company announced it was merging with rocktenn rkt.the deal is expected to close in the second quarter, at which time meadwestvaco shareholders will own 50.1 of the combined company and rocktenn shareholders the remaining 49.9. the board will consist of eight rocktenn directors and six from meadwestvaco. the ceo will be current rocktenn ceo steve voorhees, and current meadwestvaco ceo john luke will serve as nonexecutive chairman. we consider voorhees a solid choice to run the new company, as he brings a good capital allocation track record and extensive integration experience having overseen rocktenn&39s 2011 acquisition of smurfitstone and other bolton deals.we think this is a good deal for both companies and expect to raise our fair value estimates. we do not anticipate changing either company&39s nomoat rating.the companies expect to achieve 300 million in synergies over three years from supplychain optimization, infrastructurecorporate combinations, and mill and plant optimizations. we think this figure is achievable given the companies&39 overlapping paperbased packaging grades in north america and mill and plant footprints. the deal will make the combined company the 1 or 2 producer of north american sbs e.g. cigarettes, cosmetics packaging, cnk e.g. frozen food packaging, crb e.g. tissue boxes, and containerboard e.g. corrugated boxes.meadwestvaco&39s announced spinoff of the specialty chemicals business is expected to go on as planned.morningstar premium members gain exclusive access to our full meadwestvaco and rocktenn analyst reports, including fair value estimates, consider buyingselling prices, bull and bear breakdowns, and risk analyses. not a premium member get this and other reports immediately when you try morningstar premium free for 14 days. 
