Pactiv agrees to $4.5-billion takeover by Rank Group

Pactiv Corp, the maker of Hefty trash bags, agreed to be bought by Rank Group Ltd for about $4.5 billion, helping the New Zealand packaging company expand in takeout-food containers and cutlery.

The per-share price is $33.25, 39 per cent more than the $23.97 close on May 14, before talks were disclosed. Rank Group will assume about $1.5 billion in debt, valuing the transaction at about $6 billion, Pactiv spokesman Matthew Gonring said in a telephone interview.

The acquisition is the biggest deal for Rank Group’s owner and New Zealand’s richest man, Graeme Hart, a former tow-truck driver who amassed a fortune investing in businesses from lumber to dairy and built a global packaging empire through takeovers. His holdings include the world’s second-biggest drink-carton company and the maker of Reynolds Wrap foil.

“Volume plays a very important part in packaging,” said Joe Leong, a Melbourne-based food and packaging analyst at BIS Shrapnel, a provider of industry reports and forecasts. “Plastic packaging is a very technology-driven, capital-driven industry. You need to have the production capacity.”

Pactiv, based in Lake Forest, Illinois, rose $1.70, or 5.5 per cent, to $32.62 at 10 am in New York Stock Exchange.