RPC Group has announced proposed acquisition of France-based closures and dispensing systems manufacturer GCS Group for €650m (around £470m).

The UK-based plastic packaging manufacturer intends to strengthen its position across the European market through the deal.

Once the transaction is completed, the firm will be paying €186m in cash to the sellers, GCS Group and its holding company Financiere Daunou.

RPC intends to partially fund the acquisition by raising around £232.6m through a fully underwritten 1-for-5 rights issue at 460p a share.

"The combination will further strengthen RPC’s European platform in rigid plastic packaging."

The remaining amount is likely to be funded by the company with an increased revolving credit facility from £490m to £770m.

RPC Group chief executive Pim Vervaat said: "The proposed acquisition of GCS Group provides a compelling opportunity for RPC to expand its product offering with an extensive range of highly complementary closure and dispensing solutions and technologies.

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"The combination will further strengthen RPC’s European platform in rigid plastic packaging, with our enhanced scale creating significant opportunities for procurement and efficiency synergies whilst providing additional platforms for growth outside Europe."

The transaction is expected to close by the end of next March and diversify RPC’s product offerings for rigid plastic packaging markets in the continent.

It will enable the company to deliver closure solutions along with its existing packaging product lines.

RPC has also acquired plastic products maker Promens Group last year in a bid to expand its European portfolio for €386m.

Image: GCS Group product range of closures and dispensing systems will enable RPC to diversify its rigid plastic product offerings in Europe. Photo: courtesy of jk1991 via