Irish paper and packaging company Smurfit Kappa Group has confirmed advancing discussions regarding key terms of its potential merger with American corrugated packaging company Westrock.

The potential deal is claimed to result in the formation of a new holding company.

This combined group will be named “Smurfit WestRock”.

It will be established in Ireland, with its global headquarters in the Irish capital Dublin.

To manage North and South American operations, Smurfit WestRock will have a regional headquarter in Atlanta, Georgia.

The ordinary shares of this new entity will be listed on the New York Stock Exchange (NYSE) and thereafter the combined entity will pursue US equity index inclusion at the earliest possible.

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Smurfit Kappa said it is planning to cancel its premium listing on the London Stock Exchange (LSE), while also de-listing from Euronext Dublin.

The combined company will be listed on the standard listing segment.

This potential transaction would be impacted through an Irish scheme of arrangement that involves the Irish company and a merger of a subsidiary with WestRock.

Any such combination is anticipated to lead to offering WestRock shareholders a consideration comprising shares of the new entity, the Smurfit Kappa press release stated.

Smurfit WestRock, a combination of two highly complementary portfolios, will offer a wide range of recyclable and biodegradable packaging solutions.

It is projected to become a global “Go-To” packaging partner of choice, Smurfit Kappa noted.

As per the boards of Smurfit Kappa and WestRock, the potential deal is predicted to result in annual pre-tax run-rate cost synergies of $400m (€372m) by the end of the first 12 months of the merger.

Smurfit Kappa and WestRock’s combined revenue for the last 12 months, until 30 June 2023, was $34bn.

Combined earnings before interest, taxes, depreciation, and amortisation stood at $5.5bn.