WestRock sells remaining interest in RTS Packaging joint venture to Sonoco

WestRock Co. has announced it is divesting its ownership interest in RTS Packaging and selling its remaining equity interest to joint venture (JV) partner Sonoco for $330 million, subject to customary price adjustments.

The Atlanta-based packaging producer also has signed a definitive agreement to sell its uncoated recycled paperboard (URB) mills in Eaton, Indiana, and Aurora, Illinois, for $50 million to Ox Industries, a vertically integrated paper tube and core, paperboard, specialty paper and protective packaging producer based in Hanover, Pennsylvania.

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WestRock’s Chattanooga, Tennessee, mill is included in the RTS Packaging transaction. That facility supplies RTS with URB and will be strategically integrated into the Sonoco portfolio.

The transaction is expected to close in the first half of next year and is subject to the satisfaction of customary closing conditions, including regulatory approval.

“These divestitures align with WestRock’s commitment to optimize its portfolio and focus our strategy on key end markets,” WestRock CEO David B. Sewell says. “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 remained 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.”

RTS Packaging was formed in 1997 as a JV that combined the former protective packaging operations of WestRock (then known as Rock-Tenn Co.) and Sonoco to market solid fiber partitions from 100-percent-recycled paperboard to glass container manufacturers and producers of wine, liquor, food and pharmaceuticals.

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Prior to the latest transaction, Sonoco had 35 percent ownership interest and WestRock had 65 percent ownership interest in RTS. The move gives Sonoco full ownership of 14 converting operations—10 in the United States, two in Mexico and two in South America—and one paper mill.

“RTS Packaging has been a tremendous success for both WestRock and Sonoco [and] over the last 25 years, we have worked in true partnership to build a great company,” Sonoco President and CEO Howard Coker says. “we are excited to acquire the remaining stake in RTS Packaging and look forward to working with Al Bosma, who will remain as the RTS leader, and the entire management team to continue to strengthen and grow the business.”

He continues, “The acquisition is well-aligned with Sonoco’s long-term strategy to focus on our core integrated businesses and expand our sustainable consumer packaging portfolio. RTS has exposure to growing beverage markets as well as unique capabilities to support marquee customers in these markets.”