Rock-Tenn's newest acquisition, a cardboard box maker, indicative of growing manufacturing sector

on Monday, January 24, 2011

Rock-Tenn's newest acquisition, a cardboard box maker, indicative of growing manufacturing sector Cardboard boxes often serve as the transportation module of choice for companies like Amazon, UPS, and FedEx as they are both relatively inexpensive to buy and lightweight and recyclable. One of the biggest players in the packaging business announced this week it would buy a cardboard box maker in anticipation of growing sales to consumers.

Rock-Tenn Co. is a maker of packaging for food and consumer products and per terms of the newly announced deal, the packaging giant will acquire Smurfit-Stone Container Corp. for $3.5 billion in a cash and stock.

The Wall Street Journal reported that the deal is already affecting the value of other companies in the packaging industry, sending the stocks of Packaging Corp. up 2.5 percent, International Paper 3.7 percent higher and MeadWestvaco Corp. 4 percent above Friday's close.

BMO Capital Markets analyst Stephen Atkinson said that the deal between Rock-Tenn and Smurfit-Stone is "positive for the North American containerboard industry, especially considering Smurfit-Stone's penchant for discounting."

The deal is also a positive sign for the broader economy, according to experts, as Rock-Tenn's management predicts that consumers plan to buy more goods shipped in cardboard containers in the coming months after the recession battered consumer spending in the U.S. 

0 comments:

Post a Comment