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Mead and Westvaco announce merger

Aug 29, 2001 12:00 AM

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Mead Corp. (Dayton, OH) and Westvaco Corp. (Stamford, CT) announced today that they have agreed to a merger of equals, creating a global company that produces packaging, coated and specialty papers, consumer and office products, and specialty chemicals. The enterprise value of the combined organization is in excess of $10 billion.

The new company, which will be called MeadWestvaco Corp., will reportedly have $8 billion in annual revenues. Under the terms of the transaction, Mead shareholders will receive one share of MeadWestvaco stock for each share of Mead stock, and Westvaco shareholders will receive 0.97 shares of MeadWestvaco stock for each share of Westvaco stock. Mead shareholders will also receive a special payment of $1.20 per share at closing. The merger is structured as a stock-for-stock tax-free exchange, and will be accounted for as a purchase transaction under the recent guidelines for business combinations. The transaction has been approved by both Boards of Directors.

Jerry Tatar, Mead’s Chairman, president and CEO, will serve as chairman of the combined company, and John A. Luke, Jr., chairman and CEO of Westvaco, will serve as CEO and president of MeadWestvaco. The Board of Directors of MeadWestvaco will consist of equal representation from Mead and Westvaco. The combined company will employ more than 32,000 people on six continents and will be headquartered in Stamford, CT. The coated papers and consumer and office products businesses, as well as significant corporate staff, will be located in Dayton, OH.