Smurfit Kappa in merger talks with US peer WestRock

No financial details were given but a report by the Wall street Journal suggested the combined group could be worth around $20bn.

Smurfit said the potential combination would involve the creation of a new holding company, Smurfit WestRock. This would be incorporated and domiciled in Ireland with global headquarters in Dublin, and North and South American operations headquartered in Atlanta, Georgia.

"Discussions between the parties remain ongoing regarding the potential combination," Smurfit said.

"Smurfit Kappa and WestRock are engaged in a mutual due diligence process. The definitive terms and conditions of any transaction will be set out in a further announcement."

The companies are targeting annual pre-tax run-rate cost synergies in excess of $400m at the end of the first full year following completion.

Smurfit said a potential deal is expected to deliver "compelling benefits" to shareholders of the combined entity, "with transaction structure providing the opportunity for both sets of shareholders to participate meaningfully in Smurfit WestRock’s significant upside value potential".