A British packaging firm has reached across the water to snap up a U.S. rival at the same time as a U.S. firm has acquired a firm over here.

Paper and packaging company David S Smith has agreed to buy Packaging Systems LLC, which trades under the name Rapak.

The £17 million acquisition is expected to give the company valuable U.S. exposure at a time when the UK packaging market is facing a tough time.

The UK company already has a U.S.-based plastics packaging business called Formative Engineering.

David S Smith, which reported its full-year results yesterday, said growth in Europe, where a number of countries are now beginning to move out of recession, had helped offset the impact of strength of the pound against the euro and the increasing cost of raw materials.

Pre-tax profits before exceptionals were up 55 per cent at £57.7 million, from last year's £37.2 million.

Including one-off costs, the profits were £48.6 million, up from £14.2 million after a large exceptional charge last year. Group turnover was up seven per cent at £1.2 billion, up from £1.1 billion last year.

The total dividend increased by 3.7 per cent to 8.5p, from 8.2p last year.

David S Smith chairman Antony Hichens said: "All our businesses are benefiting from the recovery in the European economy and the threat of a further weakening euro appears to be receding."

At the same time, New-Jersey based shrink film packaging specialist Sealed Air said it was to buy UK company Dolphin Packaging for £79 million.

The cash offer valued Dolphin shares at 330p.

Dolphin is best known as a manufacturer of plastic packaging such as fresh meat trays, prepared salad, fruit and vegetable containers.

It operates out of five sites in the UK and has operations in the Netherlands and Republic of Ireland.