FTC requires Ball Corp to divest 8 aluminium can plants to Ardagh

Ball Corporation has agreed to sell to Ardagh Group S.A. eight U.S. aluminium can plants and associated assets in order to settle FTC charges that its proposed acquisition of Rexam PLC – worth $8.4 billion when proposed in February 2015 – is likely anticompetitive.

According to the complaint, the acquisition would eliminate direct competition in the United States between Colorado-based Ball, and United Kingdom-based Rexam, which are the first and second largest manufacturers of aluminium beverage cans in both the United States and the world. The complaint alleges without a divestiture, it is likely that the proposed merger would substantially lessen competition for standard 12-ounce aluminium cans in three regional U.S. markets – the South and Southeast, the Midwest, and the West.

The complaint also alleges that the proposed merger would substantially lessen competition for specialty aluminium cans nationwide. Ball and Rexam produce specialty aluminium cans that range in size from 7.5 ounces to 24 ounces, come in different shapes, and are used to market a wide variety of different products such as portion-controlled drinks and energy drinks.

The acquisition also would increase the likelihood of anticompetitive coordination between the two remaining independent beverage can suppliers in the U.S., resulting in higher prices and reduced quality, selection, service, and innovation.

Under the terms of the consent agreement, Ball and Rexam are required to divest eight aluminium can plants and related assets in the United States to Ardagh, one of the world’s largest producers of glass bottles for the beverage industry and metal cans for the food industry. Ardagh will acquire aluminium can body plants in Fairfield, Calif., Chicago, Ill., Whitehouse, Ohio, Fremont, Ohio, Winston-Salem, N.C., Bishopville, S.C., and Olive Branch, Miss., and Rexam’s aluminium can end plant located in Valparaiso, Ind.. Ardagh also will acquire Rexam’s U.S. headquarters in Chicago, Ill., and Rexam’s U.S. Technical Center in Elk Grove, Ill.

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.

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