UPDATE 1-Refresco to buy Cott's bottling activities for $1.25 bln

(Adds detail, background)

AMSTERDAM, July 25 (Reuters) - Netherlands-based drinks bottler Refresco said on Tuesday it had agreed to buy the bottling activities of Canada-based Cott Corp for $1.25 billion, a move that will increase its capacity in the United States.

The deal comes three months after Refresco rejected a $1.5 billion takeover offer from French private equity investor PAI Partners, saying the offer was inadequate.

Refresco said it would finance the deal with debt and then expected to issue $200 million in new shares within a year of closing the deal.

Cott's bottling activities make sales of around $1.7 billion and earnings before interest, tax, and depreciation and amortization (EBITDA) of nearly $137 million

"With the transaction we create nationwide coverage in the U.S., the largest single soft drink drinks market globally, while adding significant capacity and extending our brand product portfolio in the UK," Refresco chief executive Hans Roelofs said in a statement.

($1 = 0.8577 euros) (Reporting by Michal Aleksandrowicz; Additional reporting by Anthony Deutsch; Editing by Thyagaraju Adinarayan and Mark Potter)