Ball offers EU to sell 11 plants for Rexam deal approval
28 November 2015
U.S. drinks can maker Ball Corp is ready to sell 11 European plants to get EU antitrust regulators to approve its 4.43 billion pound ($6.69 billion) acquisition of Britain's Rexam Plc, people familiar with the matter said.
The world's two largest beverage can makers by volume want to merge to better manage capital spending and cut costs. The European Commission, however, fears the deal would push up prices for companies and consumers.
The combined company would have 60 percent of the beverage can market in North America, 69 percent in Europe and 74 percent in Brazil, according to Morningstar analysts.
Ball is prepared to divest four factories in Germany, three in the UK, one each in Spain, France, the Netherlands and Austria, the sources said on Wednesday. Nine of the plants make cans and two of them can ends. The offer was submitted to the Commission last week.
Ball has said it is willing to sell more than $1.58 billion worth of assets to allay regulatory concerns. The company is also in discussions with antitrust authorities in the United States about assets it may have to divest in that country.
Ball and Rexam have hired investment bank Goldman Sachs Group Inc to find buyers for the assets that they will sell, according to the sources. Goldman has already contacted other companies and private equity firms to solicit interest, even as the final package of assets earmarked for sale has not been finalized, the sources added.
In total, the assets for sale could have as much $200 million in annual earnings before interest, tax, depreciation and amortization, according to one of the sources. Ball has said it is willing to sell more than $1.58 billion worth of assets to allay regulatory concerns.
Ball, Rexam and Goldman Sachs offered no immediate comment.
Rexam's customers include Coca-Cola Co and Anheuser-Busch InBev.
The EU competition authority has given third parties until Wednesday to provide feedback and is likely to extend the deadline. It is scheduled to decide on the case by Jan. 22.
reuters.com