In a statement, the European Commission, the EU's executive body, said it had concerns that the proposed transaction announced in February "may reduce competition in the beverage can and aluminium bottle manufacturing industry" in the European single market.
"Very many of us buy drinks in cans - they are convenient and used everywhere," EU Competition Commissioner Margrethe Vestager said in a statement.
"It is therefore very important that the Commission makes sure that Ball's takeover of Rexam does not restrict effective competition and so risk price increases that could be passed on to consumers," she added.
Rexam and the Ball Corporation are respectively the first and second largest beverage can manufacturers in Europe and also the two market leaders worldwide.
The commission warned that an initial investigation found that any remaining competitors after the buyout "would not pose a sufficient competitive constraint on the merged entity."
After the transaction, the new company would own approximately two thirds of the plants located in Europe, the EU added.
The new company would have total revenues of approximately $15 billion and 22,500 employees worldwide.
According to EU rules, the commission now has 90 days to decide on the tie-up, though the instigation of an in-depth probe "does not prejudge the final result of the investigation."
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