US-based foam maker Dart Container has signed an agreement to acquire Solo Cup for $1bn.

Dart Container CEO Robert Dart said the transaction will enable customers to purchase a wider range of products, made from a variety of materials with varying functional and environmental attributes.

"Dart Container’s acquisition of Solo will accelerate the progress Solo has made to improve its levels of service and customer support," Dart said.

The integrated organisation will be known as Dart Container and Dart hopes to continue offering products under the Solo brand, including the red Solo cup.

Both companies, which are in the consumer and foodservice disposable packaging business, will continue to operate independently until government approval is secured and the transaction closes.

The transaction is subject to regulatory approval and is expected to close by the third quarter of this year.

In 2004, Solo Cup acquired competitor Sweetheart Cup for $917.2m but was unable to integrate the two companies.

The company sold a portion of the firm to New York-based Vestar Capital Partners in 2007, which had helped finance Sweetheart deal.

The $1.6bn Solo Cup is focused on the manufacture of single-use products used to serve food and beverages for the consumer / retail, foodservice and international markets.