Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: Ball Corp. agrees to divest aluminum can plants to acquire Rexam, (Jun 29, 2016)
Organizations Mentioned:Ardagh Group S.A. | Ball Corp | Ball Corporation | Rexam PLC
By Edward L. Puzzo, J.D.
Ball Corporation has agreed to divest eight aluminum can plants in the United States to Ardagh Group to settle FTC charges that its proposed acquisition of Rexam would be anticompetitive, the FTC has announced (In the Matter of Ball Corporation and Rexam PLC, Docket No. C-4581).
In February 2015, Colorado-based Ball Corporation announced its intention to acquire UK-based Rexam PLC in an $8.4 billion transaction. According to the FTC, Ball and Rexam are the first and second largest manufacturers of aluminum beverage cans in both the United States and the world.
Subsequently, the FTC filed a complaint alleging that the proposed acquisition would likely lessen direct competition for standard 12-ounce aluminum beverage cans and for specialty cans in three regional American markets: the South/Southeast, the Midwest and the West Coast. The FTC further alleged that the acquisition would increase the likelihood of anticompetitive coordination between the two remaining independent beverage can suppliers in the United States, resulting in higher prices and reduced quality, selection, service, and innovation.
In response to the FTC's concerns, Ball and Rexam have now agreed to divest eight aluminum can plants—in Fairfield CA, Chicago IL, Whitehouse OH, Fremont OH, Winston-Salem NC, Bishopville SC, Olive Branch MS and Valparaiso IN—to Ardagh Group, one of the world’s largest producers of glass bottles for the beverage industry and metal cans for the food industry.
Further details about the consent agreement—which includes an asset maintenance order and allows the Commission to appoint a monitor trustee—are set forth in the analysis to aid public comment for this matter. The FTC will publish the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through July 28, 2016, after which the Commission will decide whether to make the proposed consent order final.
Companies: Ball Corporation; Rexam PLC; Ardagh Group S.A.
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