US – American corrugated packaging company WestRock has entered into a definitive agreement to wholly divest its ownership interest in RTS Packaging to its joint venture (JV) partner Sonoco.
The deal, valued at US$330 million, also includes one WestRock paper mill in Chattanooga, Tennessee, US.
Formed in 1997, RTS Packaging combines the former protective packaging operations of WestRock and Sonoco.
The JV provides solid fiber and corrugated partitions to wine, liquor, food, and pharmaceutical producers.
Sonoco expects the acquired assets to generate sales of approximately US$270 million in the year ending 31 December 2022.
The deal is subject to regulatory approvals and customary closing conditions. It is expected to close in the first half of next year.
Following completion, Sonoco will take full ownership of 14 converting operations, including ten in the US, two in Mexico, two in South America and one US paper mill.
When the transaction closes, WestRock team members will transition to employment with Sonoco or Ox Industries, as applicable.
Sonoco CEO and President Howard Coker said: “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. We look forward to welcoming our RTS colleagues to the Sonoco family and building on these successful customer partnerships in the future.”
Meanwhile, the company has also signed a definitive agreement to sell its uncoated recycled paperboard (URB) mills in Eaton, Indiana, and Aurora, Illinois, to paper-based products manufacturer Ox Industries in a deal valued at US$50 million.
WestRock CEO David Sewell said: “These divestitures align with WestRock’s commitment to optimize its portfolio and focus our strategy on key end markets.
“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.”
Earlier last month, the US-based company announced plans to permanently close the corrugated medium manufacturing operations at its St. Paul, Minnesota, recycled paper mill.
WestRock said that the plan is in line with its commitment to improving returns on invested capital and maximizing the performance of its assets.
For all the latest packaging and printing industry news from Africa and the World, subscribe to our NEWSLETTER, follow us on Twitter and LinkedIn, like us on Facebook, and subscribe to our YouTube channel.