Bubble Wrap maker Sealed Air Corp said it will buy privately held cleaning products maker Diversey Holdings for $2.9 billion in cash and stock, to enter the chemical cleaning and hygiene industry.

Diversey shareholders will get $2.1 billion in cash and 31.7 million Sealed Air common shares.

Separately, Sealed Air said in a filing that Diversey had total debt of $1.53 billion as of April 1.

Packaging companies with strong balance sheets and good cash flow are looking to enter new markets. Sealed Air's buy comes just over a month after Silgan Holdings Inc , which makes cans for Campbell's Soup, bought smaller rival Graham Packaging for $1.3 billion.

With the deal, Sealed Air will expand its footprint beyond specialty packaging solutions to a $40 billion-plus chemical cleaning and hygiene industry, Sealed Air Chief Executive William Hickey said in a statement.

Diversey, partly owned by private equity firm Clayton, Dubilier & Rice, LLC, makes commercial cleaning, hygiene, pest control, and food sanitation products for retailers, building service contractors and hospitality providers.

The transaction is expected to be completed in 2011 and add to earnings in the first full year following completion.

Sealed Air, which competes with Sonoco Products Co and Bemis Co , had revenue of $4.5 billion in 2010.

The company has a total workforce of 16,000 in 51 countries.

Citi and Blackstone Advisory Partners acted as financial advisers and Simpson Thacher & Bartlett LLP acted as legal adviser to Sealed Air, the company said.

Shares of the company, valued at $4.06 billion, have risen less than 1 percent so far this year, but hit a 43-month high in February. The sector sub-index <.15GSPMA> is up 4.5 percent year-to-date.

Sealed Air shares closed at $25.68 on Tuesday on the New York Stock Exchange.

(Reporting by Divya Sharma in Bangalore; Editing by Roshni Menon)