(Bloomberg) -- Apollo Global Management Inc.-owned packaging company Novolex said it will purchase rival Pactiv Evergreen Inc. for $18 a share, or $6.7 billion including debt.

The deal disclosed Monday in a statement confirms an earlier Bloomberg report that Novolex was exploring a potential takeover.

The purchase price is 23% above Pactiv’s Friday closing price of $14.68. Pactiv’s shares gained 19% to $17.53 at 9:40 a.m. in early trading in New York on Monday. 

Companies in the fragmented packaging sector are looking for scale to boost profitability. Recent moves include Amcor Plc’s agreement to acquire Berry Global Group Inc. for about $8.4 billion in November, and International Paper Co.’s April deal for DS Smith Plc. for £5.8 billion ($7.2 billion). 

Pactiv Evergreen’s packaging products include including resealable sandwich bags, egg cartons and plastic cups, according to its website. Previously called Reynolds Group, it went public in 2020.

Novolex, which also makes food service packaging, was acquired by Apollo in 2022 from Carlyle Group Inc., which held onto a minority stake, according to a statement at the time. The transaction valued Novolex at about $6 billion, Bloomberg News reported.

Upon completion of the deal, Pactiv Evergreen will become a privately held company. The combined company will be led by Novolex chairman and Chief Executive Officer Stan Bikulege.

(Updates Pactiv share move in third paragraph.)

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