Ball Enters Phase II Review With European Commission On Rexam Deal

(RTTNews) - Ball Corp. (BLL) confirmed that the European Commission has initiated a Phase II review in connection with Ball's recommended offer to acquire Rexam Plc. (REX.L, REXMY.PK).

The transaction is also still being reviewed by other antitrust agencies, including the U.S. FTC and Brazilian CADE. Ball expects that all necessary regulatory clearances will be obtained during the first half of 2016.

Following closing of the transaction, Ball will remain a New York Stock Exchange listed company domiciled in the U.S.

Earlier today, The European Commission said it has opened an in-depth investigation to assess whether the proposed acquisition of Rexam (UK) by Ball Corporation is in line with the EU Merger Regulation.

The Commission has concerns that the proposed transaction may reduce competition in the beverage can and aluminium bottle manufacturing industry in the European Economic Area or EEA.

The Commission now has 90 working days, until 25 November 2015, to investigate in-depth the proposed acquisition and determine whether these initial concerns are founded. The opening of an in-depth inquiry does not prejudge the final result of the investigation.

The Commission's concerns relate to the supply of beverage cans and aluminium bottles throughout the EEA. Customers of Ball and Rexam include both large and small manufacturers of beer, carbonated soft drinks, energy drinks, juices and water as well as bottlers working under contract with drinks manufacturers.

After its initial investigation the Commission considers that the remaining competitors would not pose a sufficient competitive constraint on the merged entity. The investigation also suggests that the ability to compete effectively requires both a certain minimum size and a widespread network of production facilities.

The Commission will now investigate in depth the proposed transaction to determine whether these initial concerns are confirmed. The Commission will in particular examine the importance of having a sufficiently wide network of production facilities across the EEA and the barriers to entry and expansion.

In February 2015, Ball Corp. offered to acquire beverages-can maker Rexam in a cash and stock deal valued at 5.4 billion pounds or $8.4 billion, including the assumption of net debt.