Pactiv, based in Lake Forrest, Illinois, US, specialises in the production of takeaway food cartons, disposable cutlery and refuse bags. Its EarthChoice and Hefty brands include nearly 80 sustainable packaging products including cups, hinged-lid containers, plates, and straws, for disposable food service needs and waste bags.
Reynolds paid $33.25 a share for Pactiv and will take on its debt of $1.5bn.
Pactiv posted sales last year of $3.4bn and gains more than 80 per cent of its sales from market sectors in which it holds the first or second market-share position. The firm’s customers include fast-food outlets McDonald's and Starbucks.
Food service business
Richard Wambold, Pactiv’s chairman and chief executive officer, welcomed the acquisition. “We are proud of what we have accomplished, and we are excited to join with Reynolds’ consumer and foodservice businesses to grow and add more capabilities for our customers. All of the Pactiv team takes pride in the fact that we have been able to create the shareholder value released by this transaction, and we are pleased to join a group that is committed to the growth of both its packaging and consumer businesses," he said in a statement.
Graeme Hart, owner and chief executive of Rank Group, said: "Pactiv is an outstanding company. It is a clear leader in its markets as a result of its broad product line and unique distribution system. I am excited about the opportunity to grow Pactiv’s foodservice and Hefty consumer businesses and to be associated with the people who have made it such a successful company over the years.”
The acquisition will allow the Reynolds Group to expand into the food service packaging sector. Reynolds is already a leading global manufacturer and supplier of consumer food and beverage packaging and storage products and operates through four primary segments: SIG, Evergreen, Reynolds Consumer, and Closure Systems International. Reynolds Group Holdings Limited is based in Chicago, Illinois.
The acquisition was unanimously approved by Pactiv’s board of directors and is expected to be finalised in the fourth quarter of this year.
The deal is the latest in a series of acquisitions for Rank following its decision to buy Reynolds, its US packaging and consumer division from Alcoa in 2007 and SIG, the Swiss packaging company earlier in the same year.