Smurfit-Stone Container Corporation was a global
paperboard and paper-based packaging company based in
Creve Coeur, Missouri
Creve Coeur is a city located in mid St. Louis County, Missouri, United States, a part of Greater St. Louis. Its population was 18,834 at the 2020 census. Creve Coeur borders and shares a ZIP code (63141) with the neighboring city of Town and ...
, and
Chicago, Illinois
(''City in a Garden''); I Will
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, with approximately 21,000 employees. In 2007, Smurfit-Stone was ranked 13 in
PricewaterhouseCoopers
PricewaterhouseCoopers is an international professional services brand of firms, operating as partnerships under the PwC brand. It is the second-largest professional services network in the world and is considered one of the Big Four accounting ...
' "Top 100"
forest
A forest is an area of land dominated by trees. Hundreds of definitions of forest are used throughout the world, incorporating factors such as tree density, tree height, land use, legal standing, and ecological function. The United Nations' ...
,
paper
Paper is a thin sheet material produced by mechanically or chemically processing cellulose fibres derived from wood, rags, grasses or other vegetable sources in water, draining the water through fine mesh leaving the fibre evenly distributed ...
, and
packaging
Packaging is the science, art and technology of enclosing or protecting products for distribution, storage, sale, and use. Packaging also refers to the process of designing, evaluating, and producing packages. Packaging can be described as a co ...
companies in the world as ranked by sales revenue.
The company was also among the world's largest
paper recyclers.
Rock-Tenn
RockTenn was an American paper and packaging manufacturer based in Norcross, Georgia. In 2015, it merged with MeadWestvaco to form the WestRock company.
It was one of North America's leading producers of corrugated and consumer packaging an ...
bought the company in a $3.5 billion deal that closed in May 2011. Rock-Tenn is now known as
WestRock
WestRock is an American corrugated packaging company. It was formed in July 2015 after the merger of MeadWestvaco and RockTenn. WestRock is the 2nd largest American packaging company. It is one of the world's largest paper and packaging companies ...
.
Financial performance
History
![Smurfit Stone Frenchtown Montana 9](https://upload.wikimedia.org/wikipedia/commons/4/48/Smurfit_Stone_Frenchtown_Montana_9.jpg)
SSCC was formed in November 1998, with the merger of
Jefferson Smurfit Corporation (JSC) and Stone Container Corporation (Stone). JSC’s roots go back to 1974, when
Dublin
Dublin (; , or ) is the capital and largest city of Republic of Ireland, Ireland. On a bay at the mouth of the River Liffey, it is in the Provinces of Ireland, province of Leinster, bordered on the south by the Dublin Mountains, a part of th ...
,
Ireland
Ireland ( ; ga, Éire ; Ulster Scots dialect, Ulster-Scots: ) is an island in the Atlantic Ocean, North Atlantic Ocean, in Northwestern Europe, north-western Europe. It is separated from Great Britain to its east by the North Channel (Grea ...
-based
Jefferson Smurfit Group (JSG) acquired partial interest in Time Industries, a Chicago-based paper and packaging company. JSG established a major presence in the United States with the 1981 acquisition of the Alton Box Board Company and the 1982 acquisition of Diamond International’s packaging operations. In 1983, JSG’s U.S. operations reorganized and the majority of these operations became subsidiaries of JSC. JSC went on to establish a leadership position in the U.S. paper and packaging industry with its 1986 acquisition of 50 percent of
Container Corporation of America
Container Corporation of America (CCA) was founded in 1926 and manufactured corrugated boxes. In 1968 CCA merged with Montgomery Ward & Company, Inc., becoming MARCOR. MARCOR maintained separate management for the operations of each company, but ...
(CCA) from
Mobil Corporation
ExxonMobil Corporation (commonly shortened to Exxon) is an American multinational oil and gas corporation headquartered in Irving, Texas. It is the largest direct descendant of John D. Rockefeller's Standard Oil, and was formed on November 30, ...
.
Morgan Stanley Leveraged Equity Fund II (MSLEF II) purchased the other half of CCA. JSC restructured as a privately held company in 1989, jointly owned by JSG and MSLEF II. As part of the restructuring, JSC acquired the remainder of CCA. In 1994, JSC recapitalized as a publicly traded company.
Stone Container was founded in 1926 as J.H. Stone and Company. In 1945, it incorporated under the name Stone Container Corporation. In the 1950s, Stone expanded outside of Chicago, buying and building corrugated container plants in Pennsylvania, Ohio, Indiana, and Michigan. The company acquired facilities from
Continental Group
Continental may refer to:
Places
* Continent, the major landmasses of Earth
* Continental, Arizona, a small community in Pima County, Arizona, US
* Continental, Ohio, a small town in Putnam County, US
Arts and entertainment
* Continental (album), ...
in 1983 and acquired additional facilities from
Champion International Champion International was a large paper and wood products producer based since 1980 in Stamford, Connecticut. It was acquired by International Paper in 2000.
From 1893 it had been based in Hamilton, Ohio, expanding to plants in Texas and Western ...
in 1986 and Southwest Forest Industries in 1987. Stone Container sold its forest products division to management in 1996.
The merger of JSC and Stone in 1998 brought together two leaders of the paper-based packaging industry. In conjunction with the merger closing, JSG purchased 20 million shares of JSC’s stock from MSLEF II and certain other investors. In May 2000, SSCC acquired St. Laurent Paperboard, Inc. In September 2002, the company acquired
MeadWestvaco
MeadWestvaco Corporation was an American packaging company based in Richmond, Virginia. It had approximately 23,000 employees. In February 2006, it moved its corporate headquarters to Richmond. In March 2008, the company announced a change to sta ...
’s
Stevenson, Alabama
Stevenson is a city in Jackson County, Alabama, United States, and is included in the Chattanooga-Cleveland-Dalton, TN-GA-AL Combined Statistical Area. Sources listed either 1866 or 1867 as the year of incorporation, but that seems to conflict w ...
, containerboard mill and related operations. That same month, JSG privatized and distributed its stake in SSCC. Later, neither JSG nor MSLEF II were stockholders of Smurfit-Stone. In March 2003, SSCC exchanged its European assets for JSG’s 50 percent ownership of Smurfit-MBI, a Canadian packaging company, and $189 million cash. SSCC later owned 100 percent of Smurfit-MBI. As a result of this transaction, SSCC focused almost exclusively on the North American market.
In May 2008, Smurfit-Stone opened a high-tech corrugated container-producing facility in New Lenox, Illinois. The newer plant was to employ 145 people and supply companies in the pizza, oil lubricants, detergents and household goods, cooking, and health care industries.
The firm had naming rights to a high-profile building on Chicago's skyline, until it was re-named the
Crain Communications Building
The Crain Communications Building is a 39-story, 582 foot (177 m) skyscraper located at 150 North Michigan Avenue in downtown Chicago, Illinois. It was also known as the Smurfit–Stone Building and the Stone Container Building. While the bui ...
in 2012.
Products
Smurfit-Stone had two reportable business segments. The containerboard and corrugated containers segment accounted for 75 percent of net sales and included the company’s containerboard mills and corrugated container operations. The consumer packaging segment represented 20 percent of net sales and consists of CRB, folding carton plants, and multiwall and specialty bag operations. It also included packaging equipment, flexible packaging, tube, and label plants. Other operations included nonreportable segments, which accounts for 5 percent of net sales and primarily consists of recycling operations, including collection centers and brokerage sales offices.
On 15 May 2006, the firm reported the definitive sale for $1.04 billion in cash of its Consumer Packaging division to
Texas Pacific Group
TPG Inc., previously known as Texas Pacific Group and TPG Capital, is an American investment company based in Fort Worth, Texas. The private equity firm is focused on leveraged buyouts and growth capital. TPG manages investment funds in growth c ...
.
Bankruptcy and corporate reorganization
In early January 2009,
The Wall Street Journal
''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...
announced that Smurfit-Stone had hired lawyers to plan for a potential bankruptcy filing – which caused an 83% collapse of Smurfit-Stone's stock price. On January 27, 2009, Smurfit-Stone filed petitions for reorganization under
Chapter 11
Chapter 11 of the United States Bankruptcy Code (Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, wheth ...
in the
U.S. Bankruptcy Court
United States bankruptcy courts are courts created under Article I of the United States Constitution. The current system of bankruptcy courts was created by the United States Congress in 1978, effective April 1, 1984. United States bankruptcy c ...
in
Wilmington, Delaware
Wilmington ( Lenape: ''Paxahakink /'' ''Pakehakink)'' is the largest city in the U.S. state of Delaware. The city was built on the site of Fort Christina, the first Swedish settlement in North America. It lies at the confluence of the Christina ...
.
The company's CEO claims Smurfit-Stone was forced to file bankruptcy because of higher operations costs, burdensome debt levels from prior corporate mergers, and weakened demand for packaging caused by a
global economic recession.
[ Pending court approval, the company hoped to obtain debtor-in-possession (DIP) financing to continue ongoing business operations, payment of employee wages and benefits, and payment of existing vendor obligations.][
]
Rock-Tenn buyout
Rock-Tenn
RockTenn was an American paper and packaging manufacturer based in Norcross, Georgia. In 2015, it merged with MeadWestvaco to form the WestRock company.
It was one of North America's leading producers of corrugated and consumer packaging an ...
(NYSE: RKT) bought the company in a $3.5 billion deal that closed in May 2011.RockTenn completes Smurfit-Stone acquisition
''St. Louis Business Journal
American City Business Journals, Inc. (ACBJ) is an American newspaper publisher based in Charlotte, North Carolina. ACBJ publishes The Business Journals, which contains local business news for 44 markets in the United States, Hemmings Motor News ...
''. May 27, 2011.
References
External links
Smurfit-Stone
Official website (archived)
{{Authority control
Manufacturing companies established in 1998
Companies formerly listed on the New York Stock Exchange
Companies formerly listed on the Nasdaq
Defunct companies based in Chicago
Packaging companies of the United States
Companies that filed for Chapter 11 bankruptcy in 2009
Defunct pulp and paper companies
Manufacturing companies disestablished in 2011
Pulp and paper companies of the United States
2011 mergers and acquisitions
Defunct manufacturing companies based in Illinois