Ball agreed to buy Rexam for $6.7bn in February this year, which is one of the biggest takeovers in metal and glass packaging, according to Bloomberg. It has to get regulatory clearances to close the deal during the first half of 2016.
Acquisition to close in 2016
In response, Ball confirmed it had taken note of the European Commission's provisional objections and concerns as outlined in the SO.
“Ball values the insight which the SO brings on the on-going EU regulatory process,” Ball said in a statement to FE Investegate RNS Number: 8816A.
“It is the view of Ball 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.
“It is expected all necessary regulatory clearances will be obtained to enable the proposed acquisition to close during the first half of 2016. Following closing of the transaction, Ball will remain a New York Stock Exchange listed company domiciled in the US.”
Coca-Cola and AB InBev
Both Ball and London-based Rexam supply beverage containers to The Coca-Cola Company and AB InBev.
If the deal goes ahead the two companies will have about 22,500 employees, $15bn in sales and create $300m in annual cost savings.
Ball will pay Rexam as much as 302 million pounds, or 7% of the deal value, if the transaction isn’t completed because regulatory conditions aren’t satisfied.
The European Commission said in July its investigation will focus on the wide network of production facilities across Europe and the barriers to entry due to the significant investment required to build a plant.
If the deal goes ahead, it would give Ball and Rexam about two-thirds of the plants located in Europe, the EU regulator said in July, according to Bloomberg.