REX.L Share News (REX)

(ShareCast News) - Ball Corp. and Rexam agreed to divest assets to Ireland's Ardagh Group worth $3.42bn in a bid to clinch regulatory approval for their merger.The two companies, which unveiled their intention to merge and create the world's largest manufacturer of food and beverage cans on 19 February, announced they would sell the assets at a multiple of roughly 9.1 times earnings before interest, taxes, depreciation and amortisation of $375m.In parallel, Ardagh announced it had launched a $2.85bn bond issue to finance its purchases.US-based Ball agreed to sell 17 factories in the US, Europe and Brazil, together with other installations with combined annual sales of $3bn in 2015 to clinch regulatory clearance from competition authorities in Brussels.Ball and Rexam were among the largest suppliers to the likes of Coca Cola and Anheuser Busch-Inbev.Private equity outfits Apollo Global Management, Blackstone Group LP and Madison Dearborn Partners were understood to have also tabled bids for the assets.There were question marks around whether debt levels at Ardagh, which pulled an initial public offering of its cans unit last year, might prove too high a hurdle for the company to overcome.Among the assets included in Monday's announcement were eight Rexam manufacturing plants located in the US and another 12 properties in Europe and two of Ball's manufacturing plants in Brazil together with certain innovation and support centres in Germany, the UK, Switzerland, Brazil and the US.That would leave the combined company operating 75 metal beverage can manufacturing facilities around the world.Ball expects annual net cost synergies in excess of $300m to accrue to the combined firm by the third financial year after their tie-up.The bulk of those savings, 40.0%, are expected to result from optimising global sourcing through standardisation and greater purchasing volumes. A further 30.0% would come from a reduction in general and administrative expenses.As of 08:58 shares in Rexam were 0.55% higher to 639p.