WESTROCK TO BECOME PART OF SMURFIT KAPPA

The proposed US$11bn acquisition of WestRock by Smurfit Kappa has been given the go-ahead by the European Union’s Merger Regulator, and will see the creation of a $US34bn a year business.

The deal includes the former Hannapack business in Richmond, NSW, which WestRock bought from the Hanna family for $75m in 2017. The 200 staff there run four manroland 900 presses around the clock, in one of the country's biggest folding carton print operations.

The new Smurfit Kappa Westrock entity will be the world's biggest paper and packaging company, with some 100,000 employees at the combined group, which will operate 500 converting operations, and 67 mills, producing 23 million tonnes of board annually.

Smurfit Kappa does not currently operate in ANZ, although a consortium led by Dermot Smurfit saved the Whakatane mill, Australasia's only boxboard mill, from closure when it bought it three years ago. It has just made an $80m investment there in folding boxboard production, which will up output by 66,000 tonnes a year to 230,000 tonnes, and paves the way for a further 100,000 tonnes a year increase.

The European Commission concluded that the notified transaction would not raise competition concerns, given the companies' limited combined market position resulting from the proposed transaction. The notified transaction was examined under the simplified merger review procedure.

Together with his father, also named Charles, Charles Hanna founded and built the Hannapak business from scratch to become one of the leading folding carton printers in the country. They started out in 1957, initially making printed advertising balloons, then printing and making matches, before moving into folding cartons, a move turbo-charged when the company bought Boxton & Carr 40 years ago.

The business moved out of its original Carlingford home and into the new purpose-built premises in Richmond on the outskirts of Sydney, giving it the space to grow, with Hanna, who took over the reins from his father prior to the Boxton & Carr acquisition, driving that growth. His son Sam took over as CEO a decade before it was sold.

The Australian folding carton sector is fragmented, which is part of the reason IVE has decided to build a $150m a year business in what it says is $700m a year and growing sector. The newly vertically integrated WestRock will be a strong competitor, although it more targets the higher volume work.