MUNCIE, Ind. -- The Ball Corp. of Muncie and Heekin Can Inc. of Cincinnati announced Wednesday a merger agreement in which the Indiana company will acquire Heekin.
Both companies' boards of directors have approved the merger.
Under the deal, Heekin common stock is valued at $27 ar share, and each share will be converted in the merger into a fraction of a share of Ball common stock, which fraction represents a market value of $27, provided Ball will issue no more than 0.871 or fewer than 0.750 shares of its common stock for each Heekin share.
Heekin has about 3.3 million shares outstanding.
Completion of the merger, which is intended to be tax-free, is subject to approval of holders of a majority of Heekin's shares at a special meeting of stockholders, and expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.
The merger is expected to be completed within 90 days. In the event that the merger agreement is terminated, Heekin could pay Ball a fee and expenses of up to $6 million.
'We fully expect Heekin will add value for Ball shareholders and the merger is not expected to be dilutive to Ball's per share earnings,' said D.A. Davis, Ball's president and chief executive officer. 'This acquisition also reflects the company's strategy to focus its growth in the packaging business.'
Ball entered the food can business in 1988 through its now wholly owned subsidiary in Canada, and for two years has been selling food cans in the United States.
Heekin of Cincinnati manufactures metal containers and sheet products for the food, pet food and aerosol can markets. The company has 11 plants, located in Springdale and Blytheville, Ark.; Alsip, Ill.; Columbus, Ind.; Cincinnati and Columbus, Ohio; Pittsburgh, Pa.; Chestnut Hill, Tenn.; Weirton, W.Va.; and Augusta and DeForest, Wis.
The business has 1,500 employees and had 1991 sales of $353 million. Food cans accounted for 87 percent of its sales.
Ball, in efforts to focus on its core packaging business, in mid- August announced the spin-off of seven of its smaller, diversified businesses into a new company, which has since been named Alltrista Corp.
Ball manufactures metal and glass containers for the beverage and food industries and provides aerospace systems and professional services to government and commercial customers.