Ball Corp's Rexam deal faces list of EU antitrust concerns

The European Commission issued a statement of objections expressing concerns over Ball Corp's 4.4 billion-pound ($6.9 billion) purchase of Rexam Plc. This comes months after the regulators said the deal may increase the price of aluminum cans and bottles.

Ball is likely to be asked sooner or later this month to offer adequate remedies, but for which the deal might run the risk of getting blocked. Statements of objections are standard practice in complex merger cases where no concessions have yet been made.

The Ball-Rexam tie-up is the biggest takeover in metal and glass packaging, according to data compiled by Bloomberg. Both Ball and London-based Rexam supply aluminium beverage cans 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.

According to the deal, Ball will pay Rexam as much as 302 million pounds, if the transaction isn’t completed because regulatory conditions aren’t satisfied. Lower fees will apply if the sale falls through for other reasons. The takeover is expected to be completed in the first half of 2016.

Ball shares were down 0.1 percent at 12:43 p.m in New York trading after falling as much as 1.6 percent. Rexam shares fell 0.4 percent in London after declining as much as 6 percent.

The Commission said 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.