Container Giants Seal Deal

Jefferson Smurfit Corp. and Stone Container Corp. have agreed to merge, creating one of the world's largest manufacturers of paperboard and paper-based packaging products.

Under the terms of the agreement, which has been approved by the boards of directors of both companies, shareholders of Stone Container would receive .99 shares of Jefferson Smurfit stock for each common share of Chicago-based Stone Container.

The new company, Smurfit-Stone Container Corp., will be based in Chicago.

The transaction is expected to be tax-free to the shareholders of both companies.

Dr. Michael W.J. Smurfit, 61, chairman of St. Louis-based Jefferson Smurfit, will become non-executive chairman of the new company. Roger W. Stone, 63, currently chairman, president and chief executive officer of Stone Container, will be president and chief executive officer.

"We have the opportunity to create an exciting new company that will benefit shareholders, employees and customers," Stone said Sunday.

The transaction is subject to approval of Jefferson Smurfit and Stone Container's shareholders and domestic and foreign regulatory clearances.

Smurfit-Stone Container Corp., will produce corrugated containers, folding cartons, industrial bags, containerboard and recycled paperboard, with expected annual sales of more than $8 billion.

"There will be redundancies," said Ray Curran, finance director of Jefferson Smurfit Group, the Ireland-based parent of the U.S. company. Curran will be executive vice president-deputy chief executive officer of the new corporation. He gave no details about possible layoffs.

Jefferson Smurfit Corp. operates more than 150 mills and converting facilities and employees nearly 16,000 people. Stone Container has 201 manufacturing facilities and sales offices worldwide and employs more than 20,000 people.