425: Smurfit Kappa Shareholder Meetings Approve Combination with WestRock

Smurfit Kappa shareholders overwhelmingly approve all resolutions related to the proposed combination with WestRock at both the Scheme Meeting and the Extraordinary General Meeting held on June 13, 2024.

Summary

• Smurfit Kappa held a Scheme Meeting and an Extraordinary General Meeting (EGM) on June 13, 2024, to vote on resolutions related to the proposed combination with WestRock.
• All resolutions proposed at both meetings were duly passed by way of a poll.
• At the Scheme Meeting, 98.96% of votes were in favor of the Scheme, with 1.04% against.
• At the EGM, resolutions included approval of the combination, the Scheme, the LSE Listing Change, amendments to Smurfit Kappa's Articles of Association, and the Share Capital Reduction of Smurfit WestRock, all of which received over 98% approval.
• Smurfit WestRock has filed a registration statement on Form S-4 with the US SEC, which includes a prospectus relating to the offer and sale of Smurfit WestRock Shares to WestRock stockholders.
• WestRock filed a definitive proxy statement with the US SEC regarding the special meeting of WestRock Shareholders in connection with the Combination.
• Investors and shareholders are urged to read the US Registration Statement, the US Prospectus, the US Proxy Statement, and any other relevant documents filed with the US SEC.
• Citigroup Global Markets Limited is acting as lead financial adviser and sponsor to Smurfit Kappa and as listing advisor to Smurfit WestRock.
• PJT Partners (UK) Limited is acting as financial adviser to Smurfit Kappa and Smurfit WestRock.
• The announcement includes forward-looking statements regarding the combination, its benefits, and future expectations, which are subject to risks and uncertainties.
• The issuance of Smurfit WestRock Shares to Smurfit Kappa Shareholders will be exempt from registration under the US Securities Act based on the approval of the Scheme by the Irish High Court.
• Smurfit WestRock, WestRock, Smurfit Kappa, and certain of their respective directors, executive officers and other members of the management and employees may be deemed to be participants in the solicitation of proxies in connection with the Combination.

Sentiment

Score: 8

Explanation: The document indicates strong shareholder support for the merger, which is a positive sign. The deal is progressing as expected, and the regulatory filings are in place. However, the presence of forward-looking statements and associated risks tempers the overall sentiment slightly.

Positives

• Overwhelming shareholder approval for the proposed combination indicates strong support for the deal.
• The US SEC has declared the registration statement on Form S-4 effective, a key step in the combination process.
• The Irish High Court approval of the Scheme will allow Smurfit WestRock Shares to be issued without registration under the US Securities Act.

Negatives

• The announcement contains forward-looking statements, which are inherently subject to risks and uncertainties that could cause actual results to differ materially.

Risks

• The forward-looking statements are subject to various risks and uncertainties, including economic conditions, competition, regulatory changes, and the ability to successfully integrate the businesses.
• A condition to the closing of the Combination may not be satisfied.
• A regulatory approval that may be required for the Combination is delayed, is not obtained in a timely manner or at all or is obtained subject to conditions that are not anticipated.
• Smurfit WestRock may be unable to achieve the synergies and value creation contemplated by the Combination.
• Legal proceedings may be instituted against Smurfit WestRock, Smurfit Kappa or WestRock.
• The risk that disruptions from the Combination will harm Smurfit Kappas or WestRocks business, including current plans and operations.
• The Internal Revenue Service may assert that Smurfit WestRock should be treated as a US corporation or be subject to certain unfavourable US federal income tax rules under Section 7874 of the Internal Revenue Code of 1986, as amended, as a result of the Combination.

Future Outlook

The document outlines the next steps in the proposed combination of Smurfit Kappa and WestRock, including the Irish Court Hearing to sanction the Scheme and the subsequent issuance of Smurfit WestRock Shares.

Industry Context

This announcement reflects a significant consolidation move within the paper and packaging industry, as Smurfit Kappa and WestRock aim to create a global leader through their combination.

Stakeholder Impact

• Shareholders of Smurfit Kappa and WestRock will receive shares in the combined entity, Smurfit WestRock.
• Employees of both companies may be affected by the integration process.
• Customers and suppliers could see changes in their relationships with the combined company.

Next Steps

• The Irish High Court will hold a hearing to sanction the Scheme under Section 453 of the Irish Companies Act.
• If the Irish High Court approves the Scheme, Smurfit WestRock Shares will be issued without registration under the US Securities Act.
• WestRock shareholders will vote on the combination at a special meeting.

Key Dates