RICHMOND, Va. and NORCROSS, Ga.-- Early on Monday morning, January 26, two packaging giants announced that they will meld into one and create the second-largest packaging company in the world. Rock-Tenn Co. will acquire MeadWestvaco Corp. in a cash and stock deal valued at US $9.2 billion. When the dust has settled, MeadWestvaco shareholders will hold 50.1% of the new company and Rock-Tenn shareholders will own the remaining 49.9%. This transaction will be the largest in the paper industry since Koch Industries bought Georgia-Pacific in 2005 for about $12.6 billion. The new company, which will be named later, with be second in size only to International Paper, world packaging leader.

The combined company will have estimated net sales of $15.7 billion, with adjusted EBITDA of $2.9 billion. Its estimated annual sales of consumer packaging will be $6.8 billion and its corrugated box business will bring in about &7.8 billion. Synergies--largely, the elimination of redundant and duplicative efforts, expenses and personnel--are expected to bring $300 million to the new company's bottom line over three years. The merger is expected to be consummated in the second quarter of this year, pending approval by the shareholders of both the existing companies and certain regulatory approvals.

Rock-Tenn CEO Steven Voorhees will lead the merged operation, while MeadWestvaco CEO John Luke will become its non-executive chairman. The new company will be based in Richmond, Virginia, site of MeadWestvaco's current headquarters. Rock-Tenn currently has its head offices in Norcross, Georgia, an Atlanta suburb.

MeadWestvaco has approximately 23,000 employees, who produce, sell and distribute packaging, specialty papers, consumer and office products and specialty chemicals, although the latter business is being spun off. The company, which has been in the process of changing its brand to MWV since 2008, has 153 operating and office locations in 30 countries, and ships to more than 100 countries. It also manages over three million acres of forest lands. The company is the product of the 2002 merger of the Mead Corporation of Dayton, Ohio, and Westvaco

Rock-Tenn employs about 26,000 people in more than 245 facilities in North and South America, as well as China. In 2010-2011, Rock-Tenn acquired Smurfit-Stone Container, then the world's largest recycler and producer of paperboard. Rock-Tenn was formed in 1973, in a merger of Tennessee Paper Mills Inc. and Rock City Packaging.