MWV to Spin off, Merge Consumer & Office Products with ACCO Brands
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MeadWestvaco Corp., Richmond, Va., USA, will spin off its Consumer & Office Products business and has signed a definitive agreement to merge the business into ACCO Brands Corp., one of the world's largest office supply manufacturers. The tax-efficient transaction is valued at approximately $860 million to MWV and its shareholders on a pre-synergy basis.
MWV Consumer & Office Products is a manufacturer and marketer of school supplies, office products, and planning and organizing tools – including the Mead, Five Star, At-A-Glance, and Tilibra brands. The business has operations in the U.S., Canada, and Brazil. With the addition of this business, ACCO Brands will add to its existing portfolio of top-brands. ACCO Brands also will be able to expand its global footprint, including to the attractive market in Brazil, and create additional value through $30 million of estimated annual cost synergies. The transaction will enable MWV to sharpen its focus on profitable growth opportunities in large and growing global packaging markets, including food, beverage, healthcare, personal care, tobacco, and home and garden.
MWV expects the separation to occur through a "spin-merge" transaction in which the MWV Consumer & Office Products operations will be spun off in a new entity and then that entity will be immediately merged into ACCO Brands. At closing, MWV shareholders will receive 50.5% of the shares of ACCO Brands stock and MWV will receive $460 million of cash. In total, this transaction represents an aggregate value of approximately $860 million (pre-synergies) to MWV and its shareholders (based on ACCO Brands' closing stock price of $6.96 on November 16). MWV shareholders will receive approximately one share of ACCO Brands for every three shares of MWV held as of the record date.
The transaction is expected to be completed in the first half of 2012. ACCO Brands has obtained committed financing to effect the transaction, which is subject to approval by ACCO Brands' shareholders and the satisfaction of customary closing conditions and regulatory approvals, including a favorable ruling from the U.S. Internal Revenue Service. The combined business will be managed by ACCO Brands' executive team and board of directors. MWV will select two directors to join ACCO Brands' board at closing of the transaction. ACCO Brands' headquarters will remain in Lincolnshire, Ill.
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