US DISPOSABLE cup manufacturer Dart Container has agreed to buy Solo Cup in a deal valued at $1bn (£632m).
Dart paid $315m in cash for all of Solo’s equity, and plans to use remaining reserves to clear roughly $700m of Solo’s debt.
The world’s largest maker of foam cups, Dart said it has no plans to drop Solo’s iconic red plastic cups, which have inspired a hit song by US country star Toby Keith, and become a mainstay at American barbeques and college parties.
In addition to the red cups, Solo, which has $1.6bn in annual sales, also makes a variety of disposable food and drink containers out of paper, plastic, and recycled materials.
In 2004, Solo bought competitor Sweetheart for $917m. The deal pushed Solo into a loss making position after it failed to integrate the acquisition and struggled with the debt it assumed in the purchase.
Dart has said it plans to fully integrate the two US-based companies to make the deal as successful as possible. The two companies, which are both family-owned, will operate independently until the agreement closes.
The deal is expected to close by the third quarter, Dart said, pending regulatory approval.