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MeadWestvaco, Rock-Tenn join to form $16B packaging behemoth


RICHMOND, Va. (AP) -- Rock-Tenn and MeadWestvaco will join forces to create a $16 billion global packaging company, driving down its own costs and possibly gaining the scale to better dictate prices.

The new company, which had not been named as of Monday, will have combined sales of $15.7 billion and its board will include eight directors from Rock-Tenn and six directors from MeadWestvaco. Within three years, the deal is expected to result in annual cost savings of $300 million, though officials did not say if the savings would include job cuts at any of its locations around the world.

Over the last several years, MeadWestvaco has gone from a mill-centric paper supplier to a global packaging maker for brands like Procter & Gamble, Coca-Cola and Wal-Mart. This month, the company announced plans to spin off its specialty chemicals business and the sale of its European-based tobacco folding carton business - both which will move forward as planned. In late 2013, MeadWestvaco sold its U.S. forestland holdings.

Under the terms of the deal that's expected to close in the second quarter, MeadWestvaco Corp. stockholders will receive 0.78 shares of the combined company for each share they own. Rock-Tenn shareholders will be allowed to choose either 1 share of the combined company or a specific cash amount for each Rock-Tenn Co. share held.

Rock-Tenn CEO Steven Voorhees will become CEO and John Luke, Jr., chairman and CEO of MeadWestvaco, will become non-executive chairman. The company will have its principal executive offices in Richmond, Virginia, where MeadWestvaco is based. It will have operating offices in Norcross, Georgia, where Rock-Tenn is based.

The boards of both companies approved the deal, but it still requires a nod from shareholders, as well as antitrust regulators.

In a conference call with investors, the executives said the combination "makes tremendous sense" because of the companies' complementary products and markets.

Rock-Tenn has 27,000 employees with locations in the U.S., Canada, Mexico, Chile and Argentina. MeadWestvaco has 15,000 workers at 125 locations throughout North America, South America, Europe and Asia.

After hitting all-time highs late last week, shares of both companies rose higher in morning trading Monday as their quarterly earnings beat Wall Street expectations along with the announced merger.

Rock-Tenn posted first-quarter net income of $125.1 million and revenue of $2.51 billion. MeadWestvaco earned $53 million and recorded revenue of $1.37 billion for its fourth quarter.

For the year, MeadWestvaco reported profit of $263 million, or $1.53 per share. Revenue was reported as $5.63 billion.


AP Business Writer Michelle Chapman in New York contributed to this report.


Michael Felberbaum can be reached at .

© 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy and Terms of Use.

Stories we are working on for 5PM
Tonight at 5PM: What a surprise residents near Orange St. and Royal St. had when the street opened up today. KFDM's Lauren Huet reports. Plus:  A large Southeast Texas employer merges with another company to form a packaging "behemoth."

Happening Now: Large sinkhole swallows part of Beaumont street
A large sinkhole has swallowed part of the street near Orange and Royal in Beaumont.  Residents by the hole say they noticed it this morning and have been watching it grow bigger throughout the morning.  They are waiting for a city crew to come.  KFDM has a crew on the way to the site.

Motorcycle driver hurt in crash

PORT ARTHUR - A crash involving a motorcycle and pickup truck left the motorcyclist in serious condition.

According to DPS,  at about 5:30 a.m. Tuesday there was a two vehicle crash that occurred in front of Jefferson City on Highway 347 in Jefferson county.  The crash involved a pickup truck and a motorcycle.  

The driver of a 2011 Harley Davidson motorcycle was traveling southbound in the center lane on Highway 347.  The driver of a 2015 Chevrolet pickup truck was northbound on Highway 347. 

The driver of the pickup truck attempted to make a left turn in front of the motorcycle.  The motorcycle was then struck by the pickup truck.  

The driver of the Harley motorcycle, 55-year-old Ricky Collita of Port Arthur, was transported to St. Mary hospital in Port Arthur with serious injuries. 

The driver of the Chevrolet pickup truck, 32-year-old Jesus Monge of Kansas, was not injured in the crash.  

Monge was issued a traffic citation for Failure to Yield the Right of Way-Turning Left.

Man killed in auto-pedestrian accident north of Buna

JASPER COUNTY - The Texas Department of Public Safety is investigating a fatal auto-pedestrian accident several miles north of Buna.

DPS Trooper Stephanie Davis says they received the call at about 10 p.m. Monday January 26 reporting an auto-pedestrian crash on US 96 five  miles north of Buna in Jasper County.  The crash killed a 35 year old Kountze man.  

According to troopers, the driver of a 2006 Ford passenger vehicle was traveling southbound in the outside lane on US 96.  A pedestrian was walking southbound on US-96 in the outside traffic lane.  The pedestrian was struck from behind by the Ford.  

The driver of the Ford, 68-year-old June Maricle of Buna, was not injured in the crash.  The pedestrian, 35-year-old Chad Wayne Drake of Kountze, was pronounced dead at the scene by Judge Mike Smith.  

Troopers are still investigating this fatal crash.  

Crash on I-10 near Ford Park

BEAUMONT - Beaumont Police are investigating a crash on I-10 near Ford Park.

Police say their preliminary investigation shows a driver was traveling the wrong way on I-10 and was involved in a collision early Tuesday morning.

Officers tell KFDM News one person suffered serious injuries.

Pinehurst Police Officer receives minor injuries when vehicle crashes during chase

PINEHURST - From the Pinehurst Police Department

On Tuesday, 1/27/2015 at approximately 1:14 a.m. Officer Leonard Roff of the Pinehurst Police Department observed a suspicious vehicle in the 1900 block of Strickland Drive. 

The driver of the vehicle committed a traffic offense by making an illegal left turn in front of Officer Roff's police vehicle. Officer Roff attempted to initiate a traffic stop. The driver of the vehicle refused to pull over and a vehicle pursuit ensued.

Officer Roff began to purse the vehicle, a silver 2012 Silver Honda 4 door registered in Port Arthur. The vehicle traveled South on MLK Jr. Drive before turning West on Tulane Road. Officer Roff pursued the vehicle onto Old Highway 90 to Interstate 10. They traveled North on FM 1136 and then West on Highway 12. A Texas Department of Public Safety trooper joined the pursuit as they approached the City of Vidor. 

The pursuit continued westbound onto Interstate 10 in Vidor and into Beaumont. As the pursuit neared Ford Park, Officer Roff was forced to exit the interstate due to an accident already being investigated by the Beaumont Police Department. 

As he traveled west on the Interstate 10 access road he failed to negotiate a curve near the South Major Drive overpass at Interstate 10 and left the roadway. 

His vehicle, a 2011 Dodge Ram Pickup truck, struck a road sign and a small grove of trees. Officer Roff suffered minor cuts and bruises due to the impact and broken glass. He was transported by ambulance to Memorial Herman Baptist Hospital in Beaumont where he was treated and released. The vehicle sustained major damage and is believed to be a total loss.

Other police units pursued the vehicle into Harris County but they were unable to successfully stop the vehicle. At this time the suspect is still at large but a tentative identification has been made.

Incidentally, the 2012 Silver Honda is believed to be the same vehicle that was involved in a pursuit approximately 45 minutes earlier in Port Arthur following a report of aggravated assault involving an assault rifle.

ATM fraud scheme uncovered along I-10 from Baton Rouge to New Orleans

BATON ROUGE  -- Louisiana State Police said Monday that a major compromise of ATMs along the I-10 corridor from Baton Rouge to New Orleans is being investigated by local state and federal authorities including the Secret Service, according to reports from and websites.

Reports say the investigation is focused on “skimmer” which were placed on dozens of ATMs at Whitney Banks.  Those devices capture card and PIN numbers during an ATM transaction and that information can be used to gain access to bank accounts.

The unauthorized activity at several ATMS was detected by the bank Saturday.  The bank contacted law enforcement agencies and examined all of all its ATMs, removing illegal devices, according to a press release form Whitney Bank.

According to about 7,100 Whitney customers in Louisiana have been affected by the fraud scheme. said other institutions have been impacted as well.

The scheme affects institutions in "certain states" along the Interstate-10 corridor, according to statement from Whitney Bank.

This link is to an FBI page on how ATM skimmers work.

Texas ignores US program to collect unemployment debt

By Stacey Cameron AUSTIN (WOAI) - Ken Krawczynski is the owner of Kid to Kid, one of almost 400,000 small businesses in Texas, part of the engine driving our state's economy. “We are a children's resale shop. so we buy and sell kid stuff,” said Krawczynski. "And we own three stores here in San Antonio.”

One requirement of running any business is paying unemployment insurance taxes. Krawczynski's shop is no exception. "Yeah, we pay into the fund every month," said Krawczynski. In Texas an agency called the Workforce Commission runs the state's unemployment insurance.

A program set up to be a financial bridge for people hunting a new job. Since the recession of 2008, Texas workers have pocketed more than 17 billion in unemployment benefits. With a payout that huge, Workforce Commission admits, some folks got cash they didn't deserve.

"There's always some portion of unemployment payouts that we discover are over payments or fraud,” said Lisa Givens, aspokesperson for the agency. Givens says by 2017, overpayments and fraud will top 600 million dollars. Plus an extra 7.6 million owed by businesses underpaying their taxes. That growing debt bothers Krawczynski. "

It bugs me a little because we know we all would pay less if we all did things the way we are supposed to,” said Krawczynski. Givens says Workfroce Commission has ways to recover some of that money, like liens and assments.

But a News4 Trouble Shooters investigation discovered for the past three years, Texas basically ignored a federal program that would have put the state on track to collect 200 million dollars of that debt. Texas did not sign on to the program because the federal government would not cover the program's start-up costs.

"We didn't know what the costs would be. there was some unfunded it and staff costs that played into that decision," said Givens. Sources tell news 4 that no one at the state level even knew the price tag of the program and no one tried to finding out. And the state wasn't about to dip into its own pockets to get it going.

That Program is called Treasury Offset. Here is how it works in the more than three dozen states that are collecting from it. An agency, Like Workforce Commission, puts together a list of people and businesses owing money to the unemployment trust fund.

That gets sent off to Washington, D.C. and if anyone on the list is due a tax refund, the IRS grabs that cash. Then for a fee of 17 dollars sends it back to the state. But prior to a Texas Sunset Committee hearing in December, most state lawmakers did not even know the treasury offset program existed. At that hearing representative Cindy Burkett asked Workforce Commission officials why the state was not taking part in the program.

The response was that the agency needed legislative approval first. But turns out Congress is now making states sign on to the offset program by years end. "At this point we are under federal mandate so we are proceeding with coming into compliance with that," said Givens.

So forced to by Congress, state leaders in texas are finally taking action. News4 Trouble Shooters are told one of the Sunset Committee lawmakers will draft the needed legislation this session, hopefully getting back millions of dollars from people cheating unemployment. A move Krawcynski calls long overdue. "It's frustrating for all of us. you know those of us who do things right and know there's people who cheat it,” said Krawcynski.

Bad news for lovers of British chocolate lovers
Let’s Buy British Imports, or L.B.B., has agreed stop importing all Cadbury’s chocolate made overseas, as a result of a settlement with the Hershey’s Company.

The company also agreed to stop imports on KitKat bars made in Britain; Toffee Crisps, which, because of their orange packaging, and yellow-lined brown script, too closely resemble Reese’s Peanut Butter Cups; Yorkie chocolate bars, which infringe on the York peppermint patty; and Ms. Perry’s beloved Maltesers.

Jeff Beckman, a representative for Hershey’s, said L.B.B. and others were importing products "not intended for sale in the United States," infringing on its trademark and trade dress licensing.

For example, Hershey’s has a licensing agreement to manufacture Cadbury’s chocolate in the United States with similar packaging used overseas, though with a different recipe.

Beckman said it is important for Hershey to protect its trademark rights and to prevent consumers from being confused or misled when they see a product name or product package that is similar to a Hershey name or trade.

What many British-chocolate lovers are most upset about is the difference in taste between chocolate made in Britain and chocolate made in the United States.

Chocolate in Britain has a higher fat content; the first ingredient listed on a British Cadbury’s Dairy Milk (plain milk chocolate) is milk. In an American-made Cadbury’s bar, the first ingredient is sugar.

American Cadbury bars also include PGPR and soy lecithin, both emulsifiers that reduce the viscosity of chocolate, giving it a longer shelf life.

British Cadbury bars used vegetable fats and different emulsifiers

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