THE BALL-REXAM MERGER:THE CASE FOR A COMPETITIVE CAN MARKET

In this paper we address the law and economics of merger review in the context of an unexpectedly complex market: aluminum can manufacturing and distribution. With the proposed acquisition of British can manufacturer Rexam PLC by Amer- ican can manufacturer Ball Corp., competition authorities around the world — including those in Brazil, the European Union, and the United States — have re- cently focused their attention on this area.

It’s a difficult task to estimate the future consequences of business conduct. Often it is incorrectly assumed that “big is bad,” and that companies seek to merge pre- cisely because their ability to profit at competitors’ and consumers’ expense is in- creased with their larger size. But, at the same time, antitrust authorities have increasingly come to understand that big doesn’t necessarily mean bad — that economies of scale, managerial efficiencies, technological efficiencies, and the like enable firms to compete more effectively in evolving markets.