Smurfit Kappa completed its merger with Westrock on 7/8/2024 to form Smurfit Westrock. Smurfit Westrock is listed on the NYSE with the ticker symbol SW and on the London Exchange. Smurfit Kappa was not listed on a US stock exchange. Westrock shareholders received $5.00 in cash plus one (1.0) SW share for each WRK share. The transaction is a taxable event. For tax purposes this is treated as a sale of WRK for the value of stock and cash received followed by a purchase of SW from some of the proceeds of the sale. Gain or loss will be realized based on the total value of the cash and stock received and the cost basis of the WRK shares. The SEC filing for this merger can be found on the EDGAR site at
https://www.sec.gov/Archives/edgar/data/2005951/000110465924051327/tm243828-15_s4a.htm#tMUFI1 . US tax consequences are discussed starting on page 158 of this filing.
Important Reminders and Notes:
In Merger with cash transactions, realized capital gains and the cost basis of the new shares have a component dependent on the price per share chosen in the entry screens. In our experience brokers tend to use the price per share published by the companies on their websites in their guidance to shareholders. If the companies publish guidance with a share price, we use that share price in our instructions to minimize possible differences between the accounting records and broker information. In cases where no guidance is available, we will choose the lower of the opening or closing price on the effective date. Either of these prices is acceptable to the IRS and by choosing the lower price some realized capital gains will be deferred to a later date. There is always the chance the price we choose will not be the price chosen by your broker. The gain from the merger and cost basis of the new shares recorded in your accounting records will then differ from your broker information. Because of the lack of detail in the tax code, both our choice and your broker’s choice would be reasonable estimates of market value for the shares received. Your records are NOT incorrect because they differ from your broker. Tax return forms do have specific areas to report these usually small differences. Our tax printer software handles these adjustment entries automatically in the normal operation of the software.
Resolution: For Westrock shareholders this merger is a cash-plus-stock reorganization. Information for these instructions is from SEC filings, company websites, and websites offering historical stock prices.
Instructions for myICLUB Users.
Use the Merger with cash transaction.
Step 1
Step 2
Smurfit Westrock is incorporated in Ireland. Be sure to edit the Security Profile of SW to indicate the company is an Irish company. Go to Accounting > Securities > Update security settings. Click the edit icon to the left of Smurfit Westrock name.
