Novelis of Atlanta has completed its acquisition of Beachwood-based Aleris Corp. for US$2.8 billion, growing its business and strengthening its foothold in the aerospace market. For Aleris, this is the conclusion of years of acquisition attempts, reported Bloomberg.
The acquisition was first announced in July of 2018, following a failed attempt by Zhongwang acquire Aleris.
Novelis, an aluminum rolling and recycling company, is a subsidiary of Hindalco Industries, which is itself part of the Aditya Birla Group in India. The acquisition of rolled aluminum product supplier Aleris positions Novelis to better serve the Asian market by allowing it to integrate complementary assets in that region, a news release stated. The acquisition also adds the aerospace market to the company’s portfolio.
“The Aleris deal crucially enables the further diversification of our metals portfolio into other premium market segments, most notably aerospace,” Kumar Mangalam Birla, chairman of the Aditya Birla Group and Novelis, said in the release. “Through the creation of an industry champion, we are reinforcing our commitment to our customers, employees and shareholders. At the same time, with this further expansion in our aluminum portfolio, we have taken a decisive step towards a more sustainable future.”
Hindalco faced several regulatory hurdles to complete its acquisition of Aleris. The Justice Department in September filed a civil antitrust lawsuit seeking to block the purchase, citing the need to preserve competition in the North American market for rolled aluminum sheet used in automotive applications.
The lawsuit alleged that the transaction, if allowed to proceed, would enable Novelis to lock up 60% of projected total US automotive body sheet capacity, allowing the company to raise prices, reduce innovation and choice for consumers. The company will now have to divest its Lewisport plant in the US as it lost the binding arbitrage with the antitrust division.
The Aleris-Novelis deal also faced antitrust objections in the European Commission earlier last year. But in April, Hindalco secured a final approval after the sale of its Duffel plant in Belgium to Liberty House Group.
