It allegedly submitted the request to divest four factories in Germany, three in the UK, one each in Spain, France, the Netherlands and Austria to the Commission last week and is in discussions with antitrust authorities in the US to divest assets in that country.
Decision deadline January 22
The EU competition authority is scheduled to make a decision on the deal by January 22 after concerns the deal may reduce competition in the beverage can and aluminium bottle manufacturing industry.
Goldman has contacted other companies and private equity firms to solicit interest, according to Reuters. Nine of the plants make cans and two of them can ends.
Nick Mockett, head of Packaging M&A, Moorgate Capital, told BeverageDaily, the business which will be carved out by Ball and Rexam in Europe is significant.
“With $200m of EBITDA it could be valued in excess of $1.5bn, if the trading multiples of peers in the packaging industry are applied,” he said.
“In terms of potential buyers the main competitor is Crown Holdings which already has a significant footprint in Europe. So it may be more likely that the assets will end up with a private equity fund.
“The question they will need to address however is: ‘Where is the exit’ as they will typically look to sell the business on in three to five years. Given that the metal packaging industry is already relatively concentrated, with few strategic acquirers, they may need another private equity house to undertake a secondary buy-out. However, the business might be large enough to float on a stock exchange (or IPO).”
Largest beverage can manufacturers in the EEA
Rexam and Ball are the first and second largest beverage can manufacturers in the European Economic Area (EEA). Ball is the largest supplier worldwide while Rexam is the second.
Customers include large and small manufacturers of beer, carbonated soft drinks, energy drinks, juices and water as well as bottlers working under contract with drinks manufacturers.
If the acquisition went ahead, the combined company would have 60% of the beverage can market in North America, 69% in Europe and 74% in Brazil.
The combined company will have pro forma 2014 revenue of $15bn and 22,500 employees across five continents.
Only Ball is in China, US Northeast, Florida, Benelux, Poland and Serbia. Only Rexam is in India, US Pacific Northwest, Russia and Scandinavia.
Germany and the UK are the only two nations in Europe where Ball and Rexam operate plants.