WestRock To Sell Ownership Interest in RTS Packaging, LLC to Sonoco; Agrees to Sell URB Mills in Illinois and Indiana to Ox Industries

Rhea-AI Summary

WestRock Company (NYSE: WRK) has announced a definitive agreement to fully divest its ownership interest in RTS Packaging to Sonoco Products Company for $330 million, along with selling its uncoated recycled paperboard mills in Eaton, Indiana, and Aurora, Illinois, to Ox Industries for $50 million. These divestitures are part of WestRock's strategy to optimize its portfolio and focus on key end markets. Both transactions are set to close in early 2023, subject to regulatory approvals and closing conditions.

Positive

• Divestiture of RTS Packaging for $330 million enhances liquidity.
• Sale of non-priority URB mills aligns with strategic focus on core products.
• Strengthened partnership with Sonoco Products through the RTS transaction.

Negative

• Potential loss of operational scale with the sale of manufacturing facilities.

ATLANTA--(BUSINESS WIRE)-- WestRock Company [NYSE: WRK], a leading provider of sustainable paper and packaging solutions, today 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 [NYSE: SON] for $330 million, subject to customary price adjustments. In addition, the Company 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.

When the transaction closes, WestRock team members will transition to employment with Sonoco or Ox Industries, as applicable.

“These divestitures align with WestRock’s commitment to optimize its portfolio and focus our strategy on key end markets,” said David B. Sewell, chief executive officer. “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.”

About WestRock

WestRock (NYSE: WRK) partners with our customers to provide sustainable paper and packaging solutions that help them win in the marketplace. WestRock’s team members support customers around the world from locations spanning North America, South America, Europe, Asia and Australia. Learn more at www.westrock.com.

Forward-looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on our current expectations, beliefs, plans or forecasts and are typically identified by words or phrases such as “may,” “will,” “could,” “should,” “would,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “prospects,” “potential” and “forecast,” and other words, terms and phrases of similar meaning. Forward looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. We caution readers that forward-looking statements are not a guarantee of future performance and that actual results could differ materially from those contained in forward-looking statements. Our businesses are subject to a number of risks that would affect any such forward-looking statements. These risks are described in our filings with the Securities and Exchange Commission, including in Item 1A under the caption “Risk Factors” in our annual report on Form 10-K for the year ended September 30, 2021.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221109005929/en/

Media:

Robby Johnson, 470-328-6397

Manager, Corporate Communications

robby.b.johnson@westrock.com

Investors:

Rob Quartaro, 470-328-6327

Senior Vice President, Investor Relations

rob.quartaro@westrock.com

Source: WestRock Company

FAQ

What is WestRock's recent sale announcement involving RTS Packaging?

WestRock has agreed to sell its entire ownership interest in RTS Packaging to Sonoco Products Company for $330 million.

What is the significance of WestRock's sale of its uncoated recycled paperboard mills?

The sale of mills in Eaton and Aurora for $50 million reflects WestRock's strategy to optimize its product offerings.

When are the transactions expected to close?

Both transactions are expected to close in early 2023, pending regulatory approvals.

How will the divestitures affect WestRock's strategic focus?

These divestitures allow WestRock to concentrate on key end markets and sustainable packaging solutions.

What will happen to WestRock employees after the divestitures?

WestRock team members will transition to employment with Sonoco or Ox Industries following the transaction closures.