Reynolds Group to buy Pactiv Corp in a deal worth $6 billion
17 Aug 2010
New Zealand's Reynolds Group Holdings Limited today said that it will buy Pactiv Corporation (Pactiv), maker of the Hefty brand trash bags in a deal worth around $6 billion.
Under the terms of the deal, Pactiv shareholders will receive $33.25 per share in cash, a premium of 8 per cent to Pactiv's 16 August closing share price of $30.92. The purchase price is approximately $4.6 billion and Reynolds will assume Pactiv's debt of $1.4 billion.
Chicago-based Reynolds Group, owned by New Zealand's richest man Graeme Hart, is 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.
In 2008 Graeme Hart bought the packaging and consumer business of Alcoa for $2.7 billion and merged his own few packaging companies and renamed it Reynolds Packaging Group. The company had sales of $3.6 billion in 2009.
Illinois-based Pactiv is a leader in the consumer and foodservice/food packaging market. Its Hefty brand products include waste bags, slider storage bags, disposable tableware, and disposable cookware. Pactiv's foodservice/food packaging offering is one of the broadest in the industry, including both custom and stock products in a variety of materials.
With 2009 sales of $3.4 billion, Pactiv generates more than 80 per cent of its sales from market sectors in which it holds the No. 1 or No. 2 market-share position.
"Pactiv has been a leading performer in its industries since it became publicly held in 1999. 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," said Richard Wambold, Pactiv's chairman and chief executive officer.
"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. I am very pleased to add these businesses to our packaging group," said Hart.
