Smurfit WestRock plc filed SEC Form 8-K: Costs Associated with Exit or Disposal Activities, Material Impairments, Regulation FD Disclosure, Financial Statements and Exhibits
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| Item 2.05. | Costs Associated with Exit or Disposal Activities |
On April 30, 2025 Smurfit Westrock plc (the “Company”) announced it will permanently close the Company’s coated recycled board (“CRB”) mill in St. Paul, Minnesota, U.S. and will discontinue production at its containerboard mill in Forney, Texas, U.S. (the “Mill Closures”). The Company has also initiated consultations with local works councils in Germany with a view to permanently closing two converting facilities there (together with the Mill Closures, the “Closures”). Approximately 650 employees in the U.S. and Germany will be impacted as a result of the Closures and the Mill Closures are expected to reduce the Company’s containerboard and CRB capacity by over 500,000 tons annualized.
The Company expects to incur aggregate (i) pre-tax cash charges of approximately $99 million associated with the Closures, consisting of approximately $42 million in severance payments to former employees and $57 million in other restructuring costs and (ii) pre-tax non-cash asset impairment charges of approximately $188 million. The Company will recognize $226 million of the charges in the second quarter of 2025 and the remaining amount of $61 million is expected to be recognized over the remainder of 2025 and into 2026.
Headcount reductions are subject to local regulatory requirements. The estimate of charges that the Company expects to incur and the timing thereof are subject to a number of assumptions and actual results may differ from current expectations and initial estimates.
| Item 2.06 | Material Impairments |
The disclosure included under Item 2.05 is incorporated by reference into this Item 2.06.
Forward Looking Statements
This Form 8-K includes certain “forward-looking statements” (including within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) regarding, among other things, our Closures and associated headcount reduction as well as anticipated expense reductions, charges and cost savings. Statements that are not historical facts, including statements about the beliefs and expectations of the management of the Company, are forward-looking statements. Words such as “may”, “will”, “could”, “should”, “would”, “anticipate”, “intend”, “estimate”, “project”, “plan”, “believe”, “expect”, “target”, “prospects”, “potential”, “commit”, “forecasts”, “aims”, “considered”, “likely”, “estimate” and variations of these words and similar future or conditional expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. While the Company believes these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the control of the Company. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend upon future circumstances that may or may not occur. Actual results may differ materially from the current expectations of the Company depending upon a number of factors affecting its business, including risks associated with the integration and performance of the Company. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include: our ability to deliver on our Closures and associated efforts; our future cash payments associated with these initiatives; potential future cost savings associated with such initiatives; the amount of charges and the timing of such charges or actions described herein; potential future impairment charges; accuracy of assumptions associated with the charges; economic, competitive and market conditions generally, including macroeconomic uncertainty, customer inventory rebalancing, the impact of inflation and tariffs and increases in energy, raw materials, shipping, labor and capital equipment costs; the impact of public health crises; reduced supply of raw materials, energy and transportation, including from supply chain disruptions and labor shortages; developments related to pricing cycles and volumes; intense competition; geopolitical uncertainty, and conditions that may result from legislative, regulatory, trade and policy changes associated with the current or subsequent Irish, US or UK administrations; geo-economic fragmentation and protectionism such as tariffs, trade wars or similar governmental actions affecting the flows of goods, services or currency; legal proceedings instituted against the Company; actions by third parties, including government agencies; the Company’s ability to promptly and effectively integrate Smurfit Kappa’s and WestRock’s businesses (the “Combination”); the Company’s ability to achieve the synergies and value creation contemplated by the Combination; the Company's ability to meet expectations regarding the accounting and tax treatments of the Combination, including the risk that the Internal Revenue Service may assert that the Company should be treated as a US corporation or be subject to certain unfavorable US federal income tax rules under Section 7874 of the Internal Revenue Code of 1986, as amended, as a result of the Combination; other factors such as future market conditions, currency fluctuations, the behavior of other market participants, the actions of regulators and other factors such as changes in the political, social and regulatory framework in which the Company operates or in economic or technological trends or conditions, and other risk factors included in the Company's filings with the Securities and Exchange Commission. Neither the Company nor any of its associates or directors, officers or advisers provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any such forward-looking statements will actually occur. You are cautioned not to place undue reliance on these forward-looking statements. Other than in accordance with its legal or regulatory obligations (including under the UK Listing Rules, the Disclosure Guidance and Transparency Rules, the UK Market Abuse Regulation and other applicable regulations), the Company is under no obligation, and the Company expressly disclaims any intention or obligation, to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
| Item 7.01 | Regulation FD Disclosure |
On April 30, 2025, the Company issued a press release related to the Closures. A copy of the press release is attached as Exhibit 99.1.
The information provided pursuant to this Item 7.01, including Exhibit 99.1, is being “furnished” and shall not be deemed “filed” hereunder for purposes of Section 18 of the Exchange Act, or incorporated by reference in any filing under the Securities Act, except as shall be expressly set forth by specific reference in any such filings.
| Item 9.01 | Financial Statements and Exhibits |
| (d) Exhibits | |
| 99.1 | Press Release dated April 30, 2025 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Smurfit Westrock plc | ||
| /s/ Ken Bowles | ||
| Name: | Ken Bowles | |
| Title: | Executive Vice President & Group Chief Financial Officer | |
Date: April 30, 2025