The wheels continue to turn…
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As the Ball/Rexam merger continues to gather momentum it appears to be gaining interest in the financial sector too. Just today I had a phone call from an investment analyst who was keen to understand more about the industry and whether further consolidation would be likely amongst the can makers of the world.
Given that the leading players have the globe pretty much covered, what was the main motivation for the agreement? This was a question I was asked and had a little difficulty answering – other than it must be profitable, otherwise it would surely not be going ahead at all. We will be digging deeper into this question very shortly in CanTech so do keep your eyes peeled for some more detailed information very soon.
Would the other remaining players then look to consolidate in order to compete? Well, perhaps, but with a certain amount of Ball/Rexam plants set to come up for grabs due to competition concerns (provided the various panels agree to the merger) it is possible that these players will simply increase in size themselves and continue to operate in their existing spaces with increased capacity.
Are the industry suppliers worried about this merger? Well, the buzz around the various conferences we attend is very mixed. Some have concerns over two becoming one, but I think it will only be a concern if the new company decides to standardise it’s equipment across the board. Is this likely? It’s not very is it? Surely if plants are running efficiently using certain equipment it would be folly to introduce something different for the sake of uniformity? This, of course, remains to be seen, but I suspect it will not have as big an effect as some may think.
What are your thoughts on the latest with the merger? How will this merger affect your business? Are you a can maker in competition with Ball or Rexam? We’d love to hear your thoughts and opinions regardless of which area of the industry you are serving.
Leave your comments below and we will publish them accordingly.
Well Richard,
I think!
Ball and Rexam do not overlap everywhere,
In Europe ir is in the UK and Germany were they do.
In The Middle East they do not, Rexam is not that present outside China in Asia.
So I think the match is pretty good and Crown may suffer.