Rexam deal ‘no threat to rivals’

THE US can-making giant vying to buy British industrial champion Rexam sought to play down fears that the deal will stifle competition and could lead to higher prices.

Earlier this year Ball Corporation swooped on Rexam in a £4.3bn takeover that will create the industry’s largest player.

But the deal, which will give it unprecedented share of in the drinks can market, is now being probed by Eu competition chiefs. An in-depth investigation was launched by the European Commission into the deal earlier this week.

Margrethe Vestager, Eu Competition Commissioner, said: ‘Very many of us buy drinks in cans, it is therefore very important that the Commission makes sure that Ball’s takeover of Rexam does not restrict effective competition and so risk price increases that could be passed on to consumers.’

The resulting company will have almost 70pc of the European can market – more than twice the 30pc market often used by regulators as a suitable level for one company to own to ensure there is fair competition.

Ball yesterday sought to play down fears over the deal’s implication.

it called the investigation, which will last until almost Christmas, a ‘standard step’ in the process of completing a deal.

Ball is also facing probes in the US – where the combined firm will have 61pc market share – and in Brazil, where Rexam (down 3.5p to 564p) only recently expanded its operations at great cost.

There have been fears over the deal’s implications for Britain.

While Rexam owns two British plants, Ball owns three.

it is likely that the combined entity will be forced to sell some of these to Crown, which already owns two UK sites and may not have a need for more factories.

There were also questions raised at the time of the deal about the tax structure used by Ball.