The European Commission granted Ball Corporation conditional regulatory clearance for its planned $6.35 billion acquisition of rival beverage can manufacturer Rexam PLC.

The European Union’s competition regulator approved the deal on the condition Ball divest 10 can body manufacturing plants and two can end plants. The commission is also requiring Ball to divest certain European innovation and support functions in Bonn, Germany, Chester, UK and Zurich, Switzerland.

The combined company would operate Rexam’s remaining 13 European beverage can manufacturing plants and two end plants, as well as three Rexam can plants and one end plant in Russia, and Ball's Bierne, France, Belgrade, Serbia, and Lublin, Poland, manufacturing plants. In addition, Ball plans to move its European regional support office to Rexam’s Luton, UK, location and will retain Rexam's Tongwell, UK, research and development center.

Both Rexam and Ball supply beverage cans and, to a lesser extent, aluminium bottles, to soft drinks, beer and energy drinks manufacturers. Beverage cans are manufactured out of two separate metal parts, a can body and a lid (the can end), and are used to hold liquids such as carbonated soft drinks, alcoholic beverages, fruit juice and energy drinks. Rexam and Ball are, respectively, the first and second largest beverage can manufacturers in the European Economic Area and also the two market leaders worldwide.

The commission’s investigation determined the acquisition would have reduced competition in an already concentrated beverage can market and risked increasing prices for consumers.

“Soft drinks or beer in cans are widely consumed by European citizens,” says Margrethe Vestager, commissioner in charge of competition policy. “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 favorite refreshments.”

Ball received conditional regulatory approval in Brazil late last year. As part of the Brazilian conditional clearance, the company agreed to divest its plants in Alagoinhas and Jacareí. The combined company will operate Ball's remaining beverage can and end manufacturing plant in Três Rios and end plant in Simões Filho, as well as Rexam's 12 existing metal beverage manufacturing plants in South America.

Ball expects to obtain the remaining regulatory clearances to enable the proposed acquisition of Rexam PLC to close during the first half of 2016. Following closing of the transaction, Ball will remain a New York Stock Exchange listed company domiciled in the US and headquartered in Broomfield, Colorado.