NORCROSS, Ga. ( TheStreet) -- Rock-Tenn ( RKT) said Sunday that it plans to buy Smurfit-Stone Container ( SSCC) for $3.5 billion.

The cash-and-stock deal will create a leading manufacturer of paperboard and containerboard and comes just seven months after Smurfit-Stone emerged from Chapter 11 bankruptcy protection.

Rock-Tenn of Norcross, Ga. will pay a total of $35 -- consisting of 0.30605 shares of its own stock plus $17.50 in cash -- for each share of Smurfit-Stone. That represents a 27% premium to Smurfit-Stone's closing stock price level Friday.

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Rock-Tenn shares closed Friday at $57.18.

Smurfit-Stone, which is based in Creve Coeur, Mo. and Chicago, will become a wholly owned subsidiary of Rock-Tenn.

Following the acquisition, RockTenn shareholders will own approximately 56% and Smurfit-Stone shareholders will own 44% of the combined company.

The transaction is expected to close in the second quarter of this year.
This article was written by a staff member of TheStreet.

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