RCT is one of Europe's 10 largest envelope makers, with annual sales of 18m and volumes of  3bn envelopes. Location was a key factor in Bong's decision to buy the firm RCT's production is based in Hilden, near Wuppertal where Bong has its largest factory.

Anders Davidsson, Bong's president and chief executive, estimated that as a result of this deal, its European share will increase to 14-15%. It has a 15% share of the UK envelope market.

"The acquisition of RCT will increase the Bong Group's  volumes by over 20% and strengthens our position in Germany and other European envelope markets," said Davidsson.

"RCT's new and modern machinery will also enable us to further improve our manufacturing productivity and postpone replacement investments into the future."

The transaction is expected to be completed this month. The final price of RCT's shares will be determined by its financial position on the date of the acquisition.

Bong employs 1,300 people and has an annual manufacturing capacity of around 15bn envelopes across its factories in Sweden, Denmark, Norway, Finland, Poland, Germany, Belgium, the UK, Ireland and Russia.

Timeline
November 2003 - Bong UK announces 8.5% price hike across its product range from 1 January 2004
November 2004 Bong UK installs a DuPont Cyrel Fast flexo platemaking system to provide faster, more efficient, and more environmentally friendly plate production
February 2005 Bong UK sets up a new IT system to streamline processes, from buying raw materials to distribution
August 2005 Bong cuts 20 UK jobs at Milton Keynes office