Ball Corp and Rexam to sell some assets to Ardagh Group for about $3.42 bn
25 April 2016
Beverages can makers Ball Corp and Rexam Plc have agreed to sell some assets to Luxembourg-based Ardagh Group for about $3.42 billion in order to get regulatory approval for their proposed merger.
Ball Corp and Rexam have entered into an agreement with Luxembourg-based producer of glass and metal products Ardagh Group to sell certain metal beverage can assets, support locations and functions in Europe, Brazil and the US for around $3.42 billion.
The deal includes seven Rexam metal beverage can manufacturing plants and one Rexam end plant in the US, eight Ball Corp's beverage can manufacturing plants, two end plants and two Rexam beverage can manufacturing plants in Europe, two Ball Corp's beverage can manufacturing plants in Brazil, and certain innovation and support functions in Bonn, Germany; Chester, UK; Zurich, Switzerland; Sao Paulo, Brazil; and Chicago and Elk Grove, Illinois, in the US.
These divested assets had 2015 revenues of approximately $3 billion and EBITDA of approximately $375 million.
Post sale, the merged Ball Corp global metal beverage business will operate 75 metal beverage manufacturing facilities and joint ventures, as well as various support locations globally, including 26 metal beverage manufacturing facilities in North and Central America, 21 in Europe and Russia, 14 in South America, and 14 in Asia, Middle East and Africa.
Post closing of the proposed merger, Ball Corp will remain listed in the New York Stock Exchange and domiciled in the US with global headquarters in Broomfield, Colorado.
In February last year, Ball Corp, 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 in February Ball Corp said that it expects to close the deal in the first half of 2016, after receiving EC's conditional European approval for the deal.
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 Corp, 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.