REX.L Share News (REX)

(ShareCast News) - European competition regulators on Monday opened an investigation into Rexam's agreed £5.4bn takeover by US rival Ball Corporation.The European Commission will probe the deal over concerns that it may stifle competition in the continent's beverage can and aluminium bottle manufacturing industry, with the pair the first and second largest drinks can manufacturers in the region.But Ball maintained this was a "standard step" for the European Commission and added that the transaction was also still being reviewed by other antitrust agencies, including the US Federal Trade Commission and the Conselho Administrativo de Defesa Econômica in Brazil."It is expected that all necessary regulatory clearances will be obtained during the first half of 2016."Margrethe Vestager, the EC's head of competition policy, commented: "Very many of us buy drinks in cans - they are convenient and used everywhere. 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".In February, Rexam's management unanimously recommended the 628p-per-share offer by Ball, made up of 407p in cash and 0.04568 of a new Ball share, which will give Rexam shareholders a total stake of around 19% of the New York-listed company after completion of the transaction.An initial EC investigation suggested that competitors "would not pose a sufficient competitive constraint on the merged entity".With high barriers to entry on the industry, the combination of the two largest players is thought likely to result in price increases for customers and ultimately for consumers.Shares in Ball were down 1% to $70.75 after the announcement, which came after UK markets had closed for the day on Monday.