Ball Corp. and Rexam Plc have agreed to sell assets worth around USD 3.42 billion to European glass and metal packaging company Ardagh Group SA in an effort to remove antitrust concerns. The news comes following Ball's USD 6.4 billion acquisition of Rexam, which will see the two combine to become the largest food and beverage cans maker in the industry. The global food and beverage metal can market is expected to grow at a CAGR of 3.20% by 2020, according to a recent report available from Research and Markets, suggesting a stable but highly competitive market.
Ball will sell Ardagh 17 can factories plus additional facilities. The sites are located in the U.S., Europe and Brazil, and generated USD 3 billion in revenue for 2015. Ball agreed to sell 12 of its plants as part of an antitrust agreement with the European Union, and other bidders included Madison Dearborn Partners, Blackstone Group LP and Apollo Global Management.
The global packaging market is expected to reach a value of USD 48.3 billion by 2020, as forecast in an industry report, while the global beverage packaging market is predicted to be worth USD 188.31 billion by 2020, as noted in a separate market report.
Both forecasts reveal a large market value supportive of further acquisitions and industry expansion. It will be interesting to see how this value is split amongst market participants, especially now how Ardagh has gained an impressive number of new facilities across the world.
