US-based Ball Corporation is currently in talks about a possible purchase of consumer packaging leader and competitor Rexam. The UK beverage-can manufacturer has been offered 4.3 billion pounds or $6.55 billion.
Shares of Rexam saw a jolt to its eight-month high following the revelation.
Of the valued $6.55 billion, about two-thirds of the payment would be on a cash basis, while the balance would be paid in form of new Ball shares. The offer is a premium to Rexam’s closing share price on Wednesday.
If the deal pushes through, it would be a record deal for a glass or metal-container maker, according to Bloomberg-compiled data. It also highlights a consolidation in the packaging industry.
Rexam produces more than 60 billion cans a year and supplies multinational companies including Carlsberg, Anheuser-Busch, Cadbury-Schweppes, Coca-Cola, InBev, Pepsi, Heineken, Proctor & Gamble, SABMiller, and Red Bull.
According to BMO Capital Markets, the potential acquisition of Rexam would invoke antitrust concerns in several regions.
Rexam is a British multinational consumer packaging giant with headquarters in London, United Kingdom and is founded by William Vansittart Bowater in 1881. It is the world’s leading manufacturer of beverage cans with 55 plants in more than 20 countries all over Asia, North America, South America, and Europe. Rexam is listed in the London Stock Exchange and is a part of the broad FTSE 250 Index. Rexam acquired a 51% stake in United Arab Can Manufacturing Ltd for $122 million in February 2014.
Meanwhile, Ball Corporation (original name: Ball Brothers Glass Manufacturing Company) is an American firm well known for producing glass canning jars and is the world’s largest producer of recyclable beverage cans. It was founded in 1880 with current headquarters in Broomfield, Colorado. Ball has expanded into other fields such as avionics, space systems, metal beverage, and food containers, and aluminum aerosol containers.