US-based drinks can maker Ball and Rexam have agreed to sell $3.42bn of assets to Luxembourg-based packaging maker Ardagh in order to gain regulatory approval for the proposed £4.43bn merger.
The merger, which is due to be completed in June, was opposed by regulators on anti-competitive grounds.
The regulators opined that the combined entity would have a dominant position in markets such as Brazil, Europe and North America.
In order to address the issues raised by regulatory authorities, the two companies have decided to sell some of their global assets, which accounts for one-fifth of the combined production.
Ball and Rexam will also sell their innovation and support functions in Bonn in Germany, Chester in the UK, Zurich in Switzerland, Sao Paolo in Brazil, Chicago and Elk Grove, Illinois in the US. The assets, which are being sold, generated a revenue of $3bn in 2015.
Ardargh will purchase 12 plants in Europe, eight in the US, and two in Brazil. The deal is said to make Ardargh the third biggest dinks can manufacturer across the globe.
After the deal is completed, Ardargh will operate 110 facilities and expects to generate $8.8bn in annual sales, The Telegraph reported.
The combined entity will operate 75 metal beverage manufacturing facilities and joint ventures, as well as various support functions across the world.
It will operate a total of 26 beverage manufacturing facilities in the North and Central America, 21 metal beverage manufacturing facilities across Europe and Russia, and 14 metal beverage manufacturing plants in South America and 14 more in AMEA region.
Image: Ball Corporation and Rexam to sell some assets for regulatory nod for merger. Photo: Courtesy of Ball Corporation.
