WestRock to Sell Ownership Interest in RTS Packaging to Sonoco; Agrees to Sell URB Mills in Illinois and Indiana to Ox Industries
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WestRock Company announced it has entered into a definitive agreement to wholly divest its ownership interest in RTS Packaging, LLC, to joint venture partner Sonoco Products Company for $330 million, subject to customary price adjustments.
In addition, WestRock has signed a definitive agreement to sell its uncoated recycled paperboard (URB) mills in Eaton, Indiana, and Aurora, Illinois, to Ox Industries for $50 million.
WestRock's mill in Chattanooga, Tennessee, which supplies RTS with URB, is included in the RTS Packaging transaction. This mill will be strategically integrated into the Sonoco Products Company portfolio. The transaction is expected to close in the first half of 2023, subject to the satisfaction of customary closing conditions, including regulatory approval.
The Eaton and Aurora mills produce URB, which is not a priority product for WestRock, and are optimized assets for Ox Industries, a supplier and manufacturer of recycled paperboard products. The transaction is expected to close in late 2022 or early 2023.
Ox Industries noted that the two URB locations with 85,000 tons of capacity and converting capabilities will add to the company's optimized assets.
When the transaction closes, WestRock team members will transition to employment with Sonoco or Ox Industries, as applicable.
Kevin Hayward, CEO of Ox Industries, said, "We are excited to work with the Aurora and Eaton teams and welcome them to Ox. These facilities will add to our mill system and increase our niche business of vertically integrated converted paper products in the Midwest."
David Sewell, CEO of WestRock, explained, "These divestitures align with WestRock's commitment to optimize 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.
"Looking forward, we remain committed to leveraging the power of our broad, diverse portfolio of sustainable paper and packaging solutions to serve our customers and provide value to our shareholders," Sewell added.
