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Published on : Jul 21, 2015

The European Union’s competition regulator led to a detailed probe this Monday in a bid to investigate the proposed takeover of the British beverage cans maker Rexam by US company Ball Corporation. The offer placed by Ball Corporation is worth US$6.6 billion (5.8 billion euros or £4.3 billion).

In a statement about the probe, the European Commission has said that the probe against the transaction that was proposed in February may have an effect in reducing competition in the aluminium bottle and beverage can manufacturing industry in the European market.

Margrethe Vestager, European Union’s Competition Commissioner, said in a statement that many of us buy beverages in cans because they are used everywhere and are quite convenient for use. It is therefore very essential to make sure that the proposed takeover of Rexam by Ball does not have a restricting effect on the competition in the market, which could easily lead to increased prices which will be passed on to the end users, she added.

Rexam and Ball Corporation are respectively the first and second largest manufacturers of beverage cans in Europe. These two are also the world leaders in the field of beverage can manufacturing.

The commission has warned that no sufficient competitive constraint against the merger was posed by any remaining competitors of the market, as was found in initial investigation. 

After the takeover completes, the new company will gain nearly two third of Ball Corporation’s plants located in Europe. It will also have a total revenue rise of nearly US$15 billion and Ball’s 22,500 employees.

According to European Union’s rules, the commission has duration of 90 days to decide upon the takeover.