25 April 2016 by lberuti
In February 2015, Ball agreed to acquire Rexam in a deal that would combine two of the world’s largest makers of cans for drinks, and it has been trying since to win regulatory approval for the deal. Today, it announced that it had agreed with Rexam to sell plants in Brazil and Europe together with innovation and support functions in Brazil, Britain, Germany, Switzerland and the United States to ARGID (Ardagh Packaging) to satisfy some of these regulatory concerns. This divestment program itself is subject to regulatory approvals, but it should enable ARGID to acquire assets with combined revenues of around $3bln and will cost the company approximately $3.4bln. To help finance the operation, ARGID will issue $2.85bln of secured and unsecured notes in the coming weeks. They had been rumoured to be the leading bidders for Ball-Rexam assets for a while, and that is the reason why the risk premium of ARGID never really participated in the rally that took iTraxx Crossover from 336bps on the April 8th to 294bps last Friday. Nevertheless, the quasi-certain perspective of more leverage led investors to mark ARGID’s 5 year CDS 36bps wider (to 452bps) today.