- EU submits statement of objections citing competition concerns
- Ball plans concessions; sees deal closing in first half 2016
Ball Corp. vowed to address European Union concerns about its purchase of Rexam Plc after competition watchdogs sent a formal statement of objections on Thursday over a deal they warned may increase the price of aluminum cans and bottles.
The U.S. company said it still expects to obtain regulatory clearances to close the deal during the first half of 2016. Statements of objections, or SOs, are standard practice in complex merger cases where no concessions have yet been made.
“It is the view of Ball that the concerns raised in the SO allow the parties to develop the appropriate and adequate remedy package to bring about the successful clearance by the EU’s competition authority of this proposed acquisition,” the Broomfield, Colorado-based company said.
Ball agreed in February to buy Rexam for about 4.4 billion pounds ($6.7 billion) in cash and stock to create the world’s biggest maker of food and beverage cans. The tie-up is the biggest takeover in metal and glass packaging, according to data compiled by Bloomberg. Both Ball and London-based Rexam supply beverage containers to Coca-Cola Co. and brewer Anheuser-Busch InBev NV.
The combined company will have about 22,500 employees and $15 billion in sales and create $300 million in annual cost savings, according to Ball.
Ball will pay Rexam as much as 302 million pounds, or 7 percent of the deal value, if the transaction isn’t completed because regulatory conditions aren’t satisfied. The Brussels-based European Commission, the EU’s merger-review authority, declined to comment, as did Rexam.
The commission said in July its in-depth probe will focus on the importance of having a sufficiently wide network of production facilities across Europe and the barriers to entry due to the significant investment required to build a plant.
The transaction, which aims to create the world’s biggest maker of food and beverage cans, would give Ball and Rexam around two-thirds of the plants located in Europe, the EU regulator said in July.