Rexam Cleared to Buy Rostar

British packaging firm Rexam said Wednesday that anti-monopoly authorities had given it the go-ahead to buy Rostar, a unit of Oleg Deripaska's Basic Element, in a deal that would give it a commanding position in the country's beverage-can market.

Rexam said in a statement that an agreement to limit annual price increases to 15 percent over the next 10 years, barring "exceptional circumstances," was key to gaining approval from the Federal Anti-Monopoly Service.

The company said it expected to complete the deal by the end of the first quarter.

Rexam announced the deal in July, saying it would pay $297 million for can maker Rostar, including debts, from En+ Group, an arm of Basic Element.

Controlling about 50 percent of the country's aluminum can market, Rostar provides Rexam with an increased Russian presence at a time when it is looking to offset the effects of stagnating demand in markets like the United States.

But the deal foundered in September when the Federal Anti-Monopoly Service turned down the company's application, arguing that the acquisition would give Rexam, already a major can producer in Russia, 96 percent of the country's aluminum drink-can market.

Analysts said the conditions imposed by the anti-monopoly service were unlikely to have any real impact on the company.

Sandy Morris, a London-based analyst at ABN Amro, said many of Rexam's customers in Russia would be major companies like Coca-Cola, which the firm already supplies globally. It would be difficult, he said, for the company to hike prices significantly.

"Many companies would dream of raising their prices by 15 percent per annum," Morris said. "It just doesn't happen."

"It appears to be an irrelevant condition," he added.

Rexam said it also agreed to match investment in its Russian business with market growth.