25 Feb 2015 Ball agrees to buy Rexam, creating largest can maker

The deal is conditional on European Union and US regulators not requiring “material divestitures,” Broomfield, Colorado-based Ball said.

“It is yet to be seen as to whether the deal will pass regulatory scrutiny,” said Philip Barker, a partner at Cavendish Corporate Finance, a London-based mergers and acquisitions advisory firm. Should the deal proceed, it “will create a powerful and truly global player in the drinks-can market as the two largest companies in the market join forces.”

The Ball-Rexam tie-up is the biggest takeover in metal and glass packaging, according to data compiled by Bloomberg. It’s also the latest big deal in the packaging industry this year. Rock-Tenn, a paperboard producer that is North America’s second-biggest packaging company, announced a $9.4-billion merger with MeadWestvaco last month.

Both Ball and London-based Rexam supply beverage containers to Coca-Cola and brewer Anheuser-Busch InBev, according to data compiled by Bloomberg. 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.

The US company will finance the deal with a £3.3-billion bridge loan, a $3-billion credit facility and the issue of $2.2-billion of new equity.

The companies expect the takeover to be complete in the first half of 2016.

Source: Bloomberg