Graeme Hart's Reynolds Group has purchased United States company Graham Packaging for about US$1.68 billion ($2.07 billion), after rival bidder Silgan Holdings failed to come up with a better offer.

Graham, based in York, Pennsylvania, had told Silgan on June 12 that it planned to accept Reynolds' bid of US$25.50 a share, saying it was superior to Silgan's offer.

Hart's Reynolds had initially offered US$25 a share for Graham, maker of containers for items such as salsa, chocolate syrup and laundry detergent.

Stamford, Connecticut-based Silgan had until the end of Thursday (US time) to make a better offer for Graham. Graham said on Saturday that it had signed a definitive buy-out agreement with Reynolds.

Hart, New Zealand's richest man, is attempting to further consolidate the US packaging industry after acquiring Pactiv, the maker of Hefty trash bags, for US$4.5 billion in November.

Reynolds plans to pay for the acquisition with available cash and fully committed financing.

The company says the acquisition provides "strategic benefits" and cost savings.

Graham said the deal with Reynolds was valued at about US$4.5 billion, including debt.

Reynolds said it had agreed to raise its offer price on the condition that Graham agreed to shorten the amount of time after which it could end the deal if Graham's controlling shareholders did not approve the transaction by written consent.

The buyout, which was unanimously approved by Graham's board, is expected to close in the second half of the year.

- AP