US can-maker Ball in talks to buy UK rival Rexam for £4.3 bn
06 Feb 2015
Ball Corporation, a US company famous for producing glass canning jars and beverage cans, is in talks to acquire UK can-maker Rexam Plc for approximately £4.3 billion ($6.6 billion) aiming to create a global titan in the industry.
Confirming media speculation on the talks, Rexam said in a statement, ''The Board of Rexam notes the recent media speculation and confirms that it is in discussions with Ball Corporation, which may or may not lead to a formal offer being made for Rexam.''
The offer values Rexam at 610 pence per share based on a consideration of approximately two-thirds in cash and one-third in new Ball shares representing a 36-per cent premium to Rexam share on 4 February.
Further to the news, shares in Rexam jumped over 20 per cent to close at 541.50 pence yesterday in London, while shares in Ball were up 9 per cent at $72.03 in New York.
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.
The company had a debt of around £1.1 billion as at the end of June 2013.
According to some analysts, the offer price is higher compared to other metal packaging deals.
Under the UK takeover panel rules, Ball has until 5 March to announce a formal offer or call off its buyout bid.
In a separate statement, Colorado-based Ball also confirmed that it is discussions with Rexam over a possible acquisition.
''There is no certainty any formal offer will be made for Rexam,'' Ball said.
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.
