Acquisitions |
6 Months Ended | ||||||||||||||||||||
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Jun. 30, 2025 | |||||||||||||||||||||
| Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |||||||||||||||||||||
| Acquisitions | 2. Acquisitions Transaction agreement with WestRock Company Pursuant to a transaction agreement dated as of September 12, 2023 (the “Transaction Agreement”), among Smurfit Westrock, Smurfit Kappa Group plc (“Smurfit Kappa”), WestRock Company (“WestRock”) and Sun Merger Sub, LLC (“Merger Sub”) the following was completed (i) Smurfit Westrock acquired Smurfit Kappa by means of a scheme of arrangement under the Companies Act 2014 of Ireland (as amended) (the “Smurfit Kappa Share Exchange”) and (ii) Merger Sub merged with and into WestRock, with WestRock continuing as the surviving entity (the “Merger” and, together with the Smurfit Kappa Share Exchange, the “Combination”). The Combination closed on July 5, 2024 (the “Closing Date”). The aggregate merger consideration was $13,461 million. The purchase price allocation for the Merger is preliminary and is subject to revision as additional information about the acquisition- date fair value of assets and liabilities becomes available. The allocation of the purchase price with respect to the Merger is based upon management’s estimates of and assumptions related to the fair values of WestRock assets acquired and liabilities assumed as of the Closing Date. In the period since the 2024 Consolidated Financial Statements, the preliminary purchase price allocation to the fair value of the assets acquired and liabilities assumed has changed resulting in an increase in the related goodwill of $51 million. The Company has reflected the measurement period adjustments to date in the period in which the adjustments were identified, and will continue to reflect measurement period adjustments, if any, in the period in which the adjustments are identified. The Company will finalize the accounting for the Merger within the measurement period (a period not to exceed 12 months from the Closing Date). Unaudited Pro Forma Combined Financial Information The following unaudited pro forma combined financial information presents the combined results of operations for the three and six months ended June 30, 2024, as if the Merger had occurred on January 1, 2023.
The unaudited pro forma combined financial information above is based on the historical financial statements of Smurfit Kappa, WestRock, and Smurfit Westrock, and is not indicative of the results of operations that would have been achieved if the Merger had occurred on January 1, 2023, nor is it indicative of future results. The unaudited pro forma combined financial information has been prepared by applying the accounting policies of Smurfit Westrock and includes, where applicable, adjustments for the following factually supportable items or transactions, directly attributable to the Merger: (i) elimination of intercompany activity; (ii) incremental depreciation expense from the preliminary fair value adjustments to property, plant and equipment; (iii) amortization expense from the preliminary fair value adjustments to acquired intangible assets; (iv) incremental stock-based compensation expense associated with the Merger; (v) interest expense for acquisition financing and the amortization of the fair value adjustment to debt assumed; (vi) removal of pension and other postretirement amortization expense resulting from the fair value adjustment to acquired WestRock pension and other post-employment benefit assets and liabilities; (vii) changes to align accounting policies; and (viii) associated tax-related impacts of adjustments. The unaudited pro forma combined financial information also reflects a pro forma adjustment to remove $58 million and $113 million of non-recurring transaction-related costs recorded during the three and six months ended June 30, 2024 of both Smurfit Kappa and Westrock directly attributable to the Merger and to reflect these in 2023, as if the Merger had occurred on January 1, 2023. These pro forma adjustments are based on available information as of the date hereof and upon assumptions that the Company believes are reasonable to reflect the impact of the Merger on the Company’s historical financial information on a supplemental pro forma basis. Adjustments do not include costs related to integration activities, cost savings or synergies that have been or may be achieved by the combined business. For more details related to the transaction with WestRock, refer to “Note 2. Acquisitions” of the 2024 Consolidated Financial Statements.
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