Ball Corp and Rexam to sell assets worth $3 bn to allay regulatory concerns

Beverages can makers Ball Corp and Rexam Plc have started the process of selling assets worth more than $3 billion in order to meet antitrust regulations for gaining approval of their planned merger, Reuters yesterday reported, citing several people familiar with the matter.

Both companies are expected to meet with buyout groups Blackstone, Apollo, CVC, Onex and Madison Dearborn, as well as with peers Silgan and Ardagh, before final bids are due in mid-March, the report said.

In February last year, Ball Corporation, a US company famous for producing glass canning jars and beverage cans, agreed to buy UK can-maker Rexam Plc for approximately £4.3 billion ($6.6 billion) aiming to create a global titan in the industry.

The European Union antitrust watchdog, the European Commission (EC) had said in July that the merger could increase the prices of aluminum cans and bottles, giving Ball and Rexam about two-thirds of production plants located in Europe.
The EC had extended its deadline to rule on the deal until 22 January 2016 and last week Ball said that it expects to close the deal in the first half of 2016, after receiving EC's conditional European approval for the deal.

Both companies have offered to sell 12 plants across Europe, four of which are plants in Germany and three in Britain. Separately, Ball is selling about eight sites in the US and several in Brazil, the report said.

London-based Rexam is a global consumer packaging company engaged in manufacturing aluminum and steel cans for beverages, soft drinks, beer and energy drinks. The company has around 38 manufacturing units spread across the world and has around 8,000 employees.

Colorado-based Ball, founded in 1880, is a leading provider of metal packaging for beverages, foods and household products, and aerospace and other technologies and services to commercial and government customers. It employs around 14,500 people worldwide and reported sales of $8.6 billion in 2014.

Ball, Rexam and Crown Holdings are the 'big three' players in the global beverage can market with each having a share of around a fifth of the global market. The combination of Ball and Rexam would create the world's biggest can-maker with revenues of approximately $15 billion.