Mead, Westvaco Join Forces
"We are creating an exciting new business platform by capitalizing on the strategic alignment and market leadership of both companies. In packaging and coated papers, the two largest business segments, we will bring together high-quality manufacturing facilities with complementary product lines. This will position MeadWestvaco exceptionally well to meet the needs of our customers in a growing global marketplace. In addition, with a disciplined approach to capital and a strategic focus on generating superior financial returns, the new company will have the financial strength to pursue growth in targeted markets and return capital to shareholders."
The company will consist of four major business segments: packaging, coated papers, consumer and office products, and specialty chemicals. It boasts 100 operations and sales locations in 34 countries.
In a conference call with analysts, the companies said that select paper and containerboard operations are the assets most likely to be restructured, sold or closed. The evaluation of assets, along with a determination of the number of jobs that will be eliminated, is expected in the first 12 months after closing, which is scheduled to transpire at the end of the year.
What the deal does is spark even further interest in industry consolidation as newly merged companies position themselves in this competitive market.
"I think it is a good combination," Anna Torma, first vice president at Merrill Lynch in New York, told the Associated Press. "I do believe it could act as a catalyst for further consolidation in the industry."