Once the deal is completed, Sonoco will acquire 100% of the stake in RTS, which was formerly a joint venture between Sonoco (35% ownership interest) and WestRock (65% ownership interest)
WestRock to divest its remaining ownership interest in RTS Packaging to Sonoco. (Credit: Anna Hill on Unsplash)
WestRock Company has agreed to sell its ownership interest in RTS Packaging and one paper mill in Chattanooga, Tennessee to joint venture partner Sonoco Products for $330m in cash.
Additionally, the paper and packaging firm inked an agreement to sell its uncoated recycled paperboard (URB) plants in Eaton, Indiana, and Aurora, Illinois, to Ox Industries for $50m.
Both deals, subject to customary price adjustments, align with WestRock’s goal to streamline its portfolio and focus on key end markets.
WestRock’s mill in Chattanooga, Tennessee, which supplies RTS with URB, will be strategically merged into the Sonoco Products Company portfolio.
Once the deal is completed, Sonoco will acquire 100% of the stake in RTS, which was formerly a joint venture between Sonoco (35% ownership interest) and WestRock (65% ownership interest).
Subject to regulatory clearances and usual closing circumstances, the transaction is anticipated to close in the first half of 2023.
According to WestRock, the URB product is not a priority for WestRock, and the Eaton and Aurora mills are optimum assets for Ox Industries, a supplier and maker of recycled paperboard goods. The deal is anticipated to be completed in late 2022 or early 2023.
WestRock chief executive officer David Sewell said: “These divestitures align with WestRock’s commitment to optimise its portfolio and focus our strategy on key end markets.
“I want to thank the teammates in RTS Packaging and our Chattanooga, Eaton and Aurora mills for their numerous contributions to our success over the years.”
WestRock (formerly known as Rock-Tenn Company) and Sonoco combined their protective packaging businesses to form RTS Packaging in 1997.
RTS Packaging aims to sell solid fibre partitions made from 100% recycled paperboard to glass container manufacturers and producers of wine, liquor, food, and pharmaceuticals.
The transaction will give Sonoco full ownership of 14 converting operations, including 10 in the US, two in Mexico, two in South America and one paper mill in the US.
Once the deal is closed, about 1,100 individuals will become employees of Sonoco.