Packaging Corp of America said it would acquire smaller rival Boise Inc for about $1.28 billion to increase its container board capacity.

Packaging Corp's offer of $12.55 per share represents a premium of 26 percent to Boise's Friday close.

Boise shares were trading at $12.75 in premarket trading on the New York Stock Exchange.

Including debt, the deal is valued at about $2 billion.

(Reporting by Rohit T. K. in Bangalore; Editing by Saumyadeb Chakrabarty)