Hindalco to Aquire Aleris

India-based Hindalco’s wholly owned subsidiary Novelis Inc. – one of the world’s leaders in aluminum rolling and recycling – intends to purchase Aleris Corporation, a global aluminium rolled products provider headquartered in the USA, for 2.58 billion US-Dollar in a debt finance deal.

According to Kumar Mangalam Birla, Chairman of Hindalco, the Novelis acquisition more than a decade ago made Hindalco a global multinational. The acquisition of Aleris would be the next phase of its growth strategy. “This will solidify our position as the world’s no.1 aluminum value-added products player,” he was quoted. “Post this acquisition, we are well placed to serve our customers across geographies in automotive, and now the high-end aerospace segments.”

Hindalco Industries Limited is the metals flagship company of the Aditya Birla Group, a multinational conglomerate based in Mumbai, India. Since its six billion US-Dollar acquisition of Novelis in August 2007, Novelis has further invested two billion US-Dollar in the business over the last decade. The focus has been on building an early mover position in the automotive markets, creating differentiation through its sustainable operating model of recycling and deepening its commitment to future growth markets in South America and Asia. At a market segment level, the acquisition of Aleris will enrich the portfolio with the fast-growing automotive segment and entry into the high-end technology-driven aerospace segment, Hindalco informed. Moreover, access to the continuous-cast capabilities would enhance Hindalco’s competitive position in the Building and Construction (B&C) segment. “From a footprint perspective, Aleris has a wide base of manufacturing locations. This not only deepens the combined entity’s presence in developed markets like the US and Europe, but it also positions Novelis well in the emerging markets of Asia.” Aleris had invested approximately 900 million US-Dollar in the last few years in the automotive and aerospace businesses. “The ramp-up of these capacities in the near-term will significantly bolster Novelis’ growth across regions and market segments. As a result, Novelis will have a further diversified business portfolio across regions, segments and customers.” As reported by Novelis Inc., the company will acquire Aleris‘ 13 manufacturing facilities across North America, Asia and Europe. Aleris‘ new automotive finishing lines in Lewisport (Kentucky, USA) along with the auto capacity in Duffel (Belgium) would allow Novelis to further diversify its global footprint and customer base. “In addition, Aleris‘ Zhenjiang facility is strategically located near Novelis‘ existing Changzhou plant, adding value through logistical efficiencies, closed-loop recycling, and providing greater opportunity for customer collaboration.”

The acquisition is subject to customary closing conditions and regulatory approvals. It is expected to close in nine to 15 months. Until the closing, the companies will continue to operate as separate entities. Following the closing, the two companies will integrate Aleris into Novelis, which will remain headquartered in Atlanta.

www.hindalco.com, www.novelis.com, www.aleris.com

Photo: David Coleman | Dreamstime.com

GR 3/2018