The European Commission has given conditional approval to US-based Ball Corporation for the proposed £4.3bn acquisition of UK beverage can manufacturer Rexam.

Agreed last February, the deal has been approved under the EU Merger Regulation and requires Ball to make considerable divestitures of assets.

The firm will have to sell 12 production plants in the European Economic Area (EEA), which is to include eight of Ball’s existing European metal beverage can manufacturing plants and two end plants. It will also need to divest two of Rexam’s can manufacturing plants to conclude the deal.

The conditions are being imposed to maintain competition in the regional market, since Ball and Rexam are the top two can makers in the EEA.

"The substantial remedies offered will ensure that effective competition is maintained in the already concentrated drink can industry."

European Commission commissioner Margrethe Vestager said: "Soft drinks or beer in cans are widely consumed by European citizens.

"The substantial remedies offered will ensure that effective competition is maintained in the already concentrated drink can industry so consumers do not end up paying higher prices for their favourite refreshments."

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The European Commission initiated an investigation last July in order to check the concerns that the deal is likely to weaken competition in the can and aluminium bottle sectors in the EEA.

The facilities being sold include Ball’s can body manufacturing facilities in the UK, Germany, the Netherlands, Poland and France, as well as Rexam’s plants in Austria and Spain.

Conditions set by the authority also require Ball to divest certain European innovation and support functions at Bonn, Germany; Chester, UK; and Zurich, Switzerland.

Cumulative manufacturing capacity for the plants, which are to be sold, is expected to be more than 18 billion cans.

Following the merger, the combined entity will own Rexam’s remaining 13 European manufacturing plants and two end plants, in addition to three can plants and one end plant in Russia.

It will also operate Ball’s manufacturing plants at Bierne in France, Belgrade in Serbia and Lublin in Poland.

Image: A Rexam employee checks a can on production line. Photo: courtesy of Rexam.