Smurfit-Stone Container to Buy St. Laurent

Smurfit-Stone Container Corp., the world’s biggest box maker, said it agreed to buy St. Laurent Paperboard Inc. for $1.4 billion in cash, debt and stock, in a deal that would be the fifth combination among paper companies in two weeks. The company would pay $12.50 in cash and exchange a half share of Smurfit-Stone for each St. Laurent share. That is 21% above the share price when trading in St. Laurent stock on the New York Stock Exchange was halted at $16.75 after dropping 50 cents. Smurfit-Stone also would refinance $386 million of Montreal-based St. Laurent’s debt. “This is one of the better deals that we’ve seen of late,” said Robert Duncan, a forest products analyst with Research Capital Corp. in Toronto. “St. Laurent gives Smurfit access to white-top paperboard in a big way.” The shares of St. Laurent had risen about 35% since speculation of the combination began. Chicago-based Smurfit-Stone fell 81 cents to close at $15.19 on Nasdaq. The companies said the merger will generate about $50 million in annual savings. About 70% of St. Laurent’s revenue comes from the U.S., with Canada contributing 10% and the rest of the world 20%. Earlier in the week, Stora Enso Oyj, Europe’s biggest papermaker, agreed to buy Consolidated Papers Inc. for about $4.9 billion. It followed UPM-Kymmene Oyj’s agreement to buy Champion International Corp.