(Recasts; edits throughout; updates share price)

By Ernest Scheyder

NEW YORK, (Reuters) - New Zealand billionaire Graeme
Hart's Reynolds Group Holdings Ltd is buying Pactiv Corp
for about $4.6 billion in cash, adding the maker of
Hefty trash bags and disposable tableware to its packaging
group.

Hart, a former tow-truck driver who is now New Zealand's
richest man with a net worth of about $9 billion, will pay
$33.25 a share in cash for Pactiv, the companies said
Tuesday. The deal is valued at about $6 billion including
debt.

Hart, who also owns timber and paper businesses, has a
history of large acquisitions, which include buying the
Reynolds aluminum business from Alcoa Inc in 2008 for
nearly $3 billion. The Pactiv deal is the largest ever for
him.

The privately held aluminum foil maker beat out rivals
bidders Apollo Management LP and Koch Industries
Inc's Georgia-Pacific Corp, a source familiar with
the matter said.

The deal offers a 7.5 percent premium over Monday's closing
price of Pactiv and is 38.7 percent above the stock's value on
May 17, when news of Pactiv's intent to sell itself first
surfaced.

Given the high level of competition for the Hefty brand, a
final price of at least $34 per share had been expected, Robert
W. Baird & Co analyst Ghansham Panjabi said.

"I'm surprised the transaction price was where it was,"
Panjabi said. "It seems a little low given the number of
bidders that the media have said were in there."

Pactiv's shares closed up 5.4 percent at $32.58 on the New
York Stock Exchange.

Reynolds, a subsidiary of Hart's Rank Group Ltd, expects to
finance the deal with up to $5 billion of new debt. It has
obtained committed debt financing from Credit Suisse Group AG
, HSBC Holdings Plc and Australia and New
Zealand Banking Group Ltd.

Pactiv's board unanimously agreed to the offer and the
company plans to hold a shareholder meeting to vote on the deal
"as soon as practicable."

The deal is expected to close, pending filing with the
Securities and Exchange Commission, by the end of the year.

The deal comes less than a month after Pactiv said its
quarterly profit slipped on high raw material costs and guided
for a third-quarter profit below expectations.

Credit Suisse was the lead financial advisor to Pactiv.
Perella Weinberg Partners acted as independent financial
advisor to Pactiv's board. Skadden, Arps, Slate, Meagher and
Flom LLP is acting as legal counsel to Pactiv.
(Reporting by Ernest Scheyder; additional reporting by Matt
Daily, Mike Erman, Megan Davies and Paritosh Bansal; editing by
Derek Caney, Gunna Dickson and Andre Grenon)