Business Context and Reporting Period
This Form 8-K, filed on June 15, 2015, by Ball Corporation (Ball), addresses the ongoing proposed acquisition of Rexam PLC (Rexam). The filing updates investors on a recommended cash and stock offer announced on February 19, 2015, and amended on June 12, 2015. The document incorporates by reference Rexam's audited financial statements for the years ended December 31, 2014 and 2013, and Ball's unaudited pro forma condensed combined financial statements for the year ended December 31, 2014, and the three months ended March 31, 2015.
Key Financial Metrics
This filing serves as a current report regarding the acquisition event and does not contain Ball's standalone revenue, profit, cash flow, or debt figures for the current period. Specific financial values are located in the attached exhibits:
- Rexam Financials: Audited consolidated statements for 2013 and 2014 are included in Exhibit 99.1.
- Pro Forma Financials: Unaudited combined statements for Ball and Rexam for the year ended December 31, 2014, and the quarter ended March 31, 2015, are included in Exhibit 99.2.
- Transaction Structure: The acquisition is structured as a cash and stock transaction.
Material Changes and Transaction Status
The primary material event is the progression of the Rexam acquisition. Ball filed a preliminary proxy statement with the SEC on June 11, 2015, regarding the issuance of Ball common stock required for the deal. A definitive proxy statement is expected to be filed later. The transaction is subject to conditions, including regulatory approvals and shareholder votes. If executed as a Scheme under English law, the stock issuance may be exempt from registration under Section 3(a)(10) of the Securities Act of 1933; otherwise, a registration statement will be filed.
Outlook, Risks, and Contingencies
Management highlights significant risks that could cause actual results to differ from forward-looking statements:
- Acquisition Risks: Failure to satisfy conditions for completion, including regulatory approvals; termination of the definitive agreement; and legal proceedings related to the acquisition.
- Operational Risks: Product demand fluctuations, raw material costs, competitive pricing, and changes in major customer contracts.
- Regulatory and Environmental: Mandatory deposit laws, FDA actions, and environmental or workplace safety issues.
- Financial Risks: Interest rate fluctuations affecting debt, foreign exchange rates, and pension plan performance.
- Segment-Specific Risks: Aerospace segment risks include government funding authorization and contract delays.
Investor Verification Checklist
- Review the definitive proxy statement and registration statement/prospectus once filed to understand the final terms of the stock issuance.
- Examine Exhibit 99.2 for the unaudited pro forma financial impact of the Rexam acquisition on Ball's combined entity.
- Monitor the status of required regulatory approvals and shareholder votes necessary to close the transaction.
- Verify the potential exemption status of the stock issuance under Section 3(a)(10) of the Securities Act of 1933.
- Assess the risks outlined in the forward-looking statements section regarding the ability to achieve cost-out initiatives and integration success.