Carnaud bid faces final hurdle

A takeover by America's Crown Cork & Seal of the Anglo-French company CarnaudMetalbox, creating the world's largest packaging company, is about to clear its final hurdles.

Shares in CarnaudMetalbox were suspended in Paris and London yesterday while the Bourse dealt with the necessary regulatory formalities for the $5.2bn (pounds 3.3bn) takeover.

A formal announcement of details of Crown Cork's plans, bringing together companies with combined sales of $10bn, is expected tomorrow. Crown Cork's shareholders approved the takeover on Tuesday.

The takeover has already been given the green light by the European Commission after the two sides agreed to sell five aerosol can factories. It is thought to be the biggest merger to come before the EC.

Europe's competition officials feared that the takeover would have distorted the tinplate market, giving the two companies a 60 per cent share within the Union, against a 20 per cent share held by its nearest rival.

After the takeover the group will have a market share of about 40 per cent in food cans. The nearest competitor will be Germany's Schmalbach- Lubeca, with about 20 per cent of the market.

Crown Cork is offering 1.086 "units" for each CarnaudMetalbox share. Each unit is made up of 0.75 Crown ordinary shares and 0.25 preferential shares, or Fr225 (pounds 30) in cash.

Earlier this month Crown Cork shares fell sharply after a profits warning, casting a cloud on the takeover plans. The company said its second-half earnings before charges would probably be under $55m, against last year's $121m. The company blamed rising raw material prices, expecially aluminium.

During the summer CarnaudMetalbox issued its own profits warning and the chairman, Jurgen Hintz, announced his resignation a few weeks later. It is thought that Mr Hintz had strong objections to the Crown Cork deal.