Packaging solutions provider Graphic Packaging has announced an agreement for one of its subsidiaries to acquire the Beer and Beverage packaging business of A&R Carton in Europe for €26m.

A&R’s business includes two manufacturing facilities that convert about 30,000t of paperboard annually.

The company’s folding carton facilities are located in the Netherlands and Germany.

Graphic Packaging president and chief executive officer David Scheible said the combination of both the companies will allow it to better serve its global beverage customers with a wide base of new products and services.

"The acquisition of A&R Carton’s Beer and Beverage packaging business enhances our position in the European beverage packaging market and enables us to extend our customer reach in the region," Scheible said.

The company proposes to increase its European business around food and beverage markets, similar to its US strategy, and optimise its supply chain footprint around its customers’ needs.

Graphic Packaging will fund the transaction with existing cash and borrowings from the company’s current revolving line of credit.

According to Graphic Packaging, the acquisition, which is subject to standard closing requirements, is expected to close in late December 2012.

Recently, the company announced an agreement to acquire Contego Cartons, a food and consumer product packaging company in the UK, for €81m.

The combination of Graphic Packaging, Contego and A&R is said to create a $500m business in Europe.

US-based Graphic Packaging, which produces folding cartons, provides packaging solutions for a wide variety of products to food, beverage and other consumer products companies.