European Union antitrust regulators said Monday they have opened an in-depth investigation into Ball Corp.’s £4.4 billion ($6.86 billion) acquisition of Rexam PLC amid concerns that the deal could lead to higher prices for beverage cans.
The deal, announced in February, will create one of the world’s biggest consumer-packaging suppliers. Broomfield, Colo.-based Ball is famous for its glass canning jars, while Rexam’s customers include Coca-Cola Co. and PepsiCo Inc.
The European Commission, EU’s top antitrust regulator, said it had concerns that the combination of the largest and second-largest beverage can makers by sales in Europe would reduce competition.
The merger would give the parties “very high” market shares and leave only two other competitors on the market, the commission said in a statement. The merging parties would also own about two-thirds of the plants in Europe, it said.
EU antitrust chief Margrethe Vestager said it was “very important” to ensure that the deal didn’t “restrict effective competition and so risk price increases that could be passed on to consumers.”
The decision to open an in-depth probe means that the EU has concrete concerns about the deal but doesn’t prejudge the outcome.
The EU said it would make a decision on whether to approve the deal by Nov. 25.
In a statement, Ball said that the EU’s move was a “standard step” in its merger-review process, and that it expected to receive “all necessary regulatory clearances” in the first half of next year. The U.S. Federal Trade Commission and Brazil’s antitrust regulator are still reviewing the deal, Ball added.