Hart snaps up US rubbish bag maker

New Zealand billionaire Graeme Hart has successfully bid more than $6 billion for US-based Pactiv, the maker of Hefty trash bags, to expand his packaging empire's footprint in takeout-food containers and plastic cutlery.

The acquisition is the biggest deal so far for Mr Hart, a former tow-truck driver who amassed a fortune investing in businesses from forestry 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.

Mr Hart's Rank Group will also assume about US$1.5 billion ($2.1 billion) in debt, valuing the overall transaction at about $6 billion, Pactiv spokesman Matthew Gonring told Bloomberg newsagency.

The bid was made through Reynolds Group Holdings, part of Mr Hart's global packaging business, in the latest and biggest of a string of deals that has built Reynolds' parent company Rank Group into a worldwide packaging empire.

Pactiv, based in Lake Forest, Illinois, makes items such as takeout food containers, disposable cookware and garbage cans, Associated Press reported.

Chicago-based Reynolds expects to close the acquisition in the fourth quarter, and said it would finance the buyout with US$5 billion in new debt from affiliates of Credit Suisse, HSBC, and Australia New Zealand Bank.

Mr Hart's estimated US$5.3 billion fortune earned him the No 144 spot on Forbes magazine's list of the world's richest people.

He began bulking up Rank Group's packaging business back in 2007 when it agreed to buy SIG, a Swiss food-packaging company.

In 2008, Rank paid US$2.7 billion for the food-packaging division of Alcoa Inc, which included Reynolds, and in 2009 a consolidated form of Reynolds had sales of US$3.6 billion.

In April, Mr Hart consolidated some of his holdings in the industry, looking to raise US$1.75 billion so that Reynolds could buy two other companies that Mr Hart already owned, US-based Evergreen Packaging and the paper mill at Whakatane.

At the time, it was reported that Reynolds Group planned to increase its debts to $8.2 billion.

Pactiv Corp had annual revenue last year of close to US$3.4 billion.

"Pactiv is an outstanding company," Mr Hart said today in a statement.

"It is a clear leader in its markets as a result of its broad product line and unique distribution system."

Pactiv, led by chief executive Richard Wambold, pulled in US$3.4 billion in sales last year. Revenue fell 6.2 percent in 2009 as consumers spent less during the economic decline.

- AP