One day this week, Rock-Tenn CEO Steven Vorhees’ assistant gave him a new business card. At the top, the company name had been changed. He was now the CEO of “Mergeco.”
Rock-Tenn announced its merger with Richmond, Va.-based MeadWestvaco Monday, and while Voorhees will be CEO of the combined company, and will continue to work out of its Norcross office, there’s a lot that the paper and packaging companies need to decide. The new company’s name is one of them.
While Voorhees said the combined business will "continue to have a substantial presence" in Norcross, where 1,200 people work at Rock-Tenn's headquarters, the executive offices will be in Richmond. Voorhees said he is trying to avoid an Atlanta-vs.-Richmond mentality, adding, "I don't think it's appropriate to say the base is in Richmond."
Rock-Tenn has said its operations center will remain here, and Voorhees said businesses such as paper mills, folding cartons and corrugated cardboard for boxes will continue to be run out of Georgia. He said a large-scale movement of employees is “impractical” and he does not expect “significant” job losses.
“It’s too early to say who does what in each location,” Voorhees said. “I believe in growth. We’re committed to metro Atlanta. We’re going to remain committed to metro Atlanta.”
But the company’s business address will be in Virginia, a psychological hit if not an economic one. It’s the second Gwinnett County has suffered in recent weeks: NCR, based in Duluth, announced earlier this month that it will move its headquarters to Midtown Atlanta. Both Rock-Tenn and NCR are Fortune 500 companies.
Larry Gellerstedt, a 17-year member of Rock-Tenn’s board and chair of the Metro Atlanta Chamber of Commerce, said he thinks the Rock-Tenn merger will be “fantastic” for Atlanta, even if the corporate address leaves the state.
“I look at it, really, as a dual headquarters strategy to start,” Gellerstedt said. “I don’t look at it as Atlanta lost a headquarters.”
He said in mergers, it is “not unusual at the start for there to be split operations” while the new company gets its footing. Gellerstedt said he thinks the region will continue to benefit from the company’s presence.
“With no qualms, I have 100 percent confidence it’s going to be good for Atlanta,” he said.
Gellerstedt added that he did not expect the company to pit cities against each other in an eventual bidding war for incentives.
The companies said they expect $300 million in savings over three years in the merger, which will create a $16 billion company, the second-largest packaging company in the world.
“It’s so easy to talk about who wins, who loses,” Voorhees said. “This is a win-win thing.”
About the Author
