Kumar Mangalam Birla led Aditya Birla Group announced that Novelis has bought out Ohio-based aluminium maker Aleris Corp for $2.6 billion.
Novelis Inc, the world leader in aluminium rolling and recycling, said today it has signed a definitive agreement to acquire Aleris Corporation, a global supplier of rolled aluminium products, for approximately $2.6 billion including the assumption of debt, said Novelis website.
“Acquiring Aleris is the right opportunity at the right time as they are set for transformational growth,” said Steve Fisher, President and CEO, Novelis Inc, adding “The significant investments they’ve made in the high-demand, high-value aerospace and automotive segments have resulted in favorable long-term, global contracts. These investments, coupled with a diverse and talented workforce, will add tremendous value to our organization and allow us to deliver the highest quality innovative aluminum solutions to our customers.”
For Novelis, Aleris, and their customers, the proposed acquisition will deliver a number of significant benefits by:
-Establishing a more diverse product portfolio, including aerospace, beverage can, automotive, building and construction, commercial transportation and specialty products.
-Integrating complementary assets in Asia to include recycling, casting, rolling and finishing capabilities and allowing Novelis to more efficiently serve the growing Asia market.
-Broadening Novelis’ automotive business to meet growing demand and diversifying its global footprint and customer base.
Strengthening ability to compete against steel by gaining a greater platform for production, innovation and service.
-Executing a fully debt funded deal with leverage forecasted to peak below 4x at closing, and return to 3x in approximately two years.
Earlier, negotiations had slowed down primarily due to antitrust issues surrounding Aleris. However, the talks revived after the managements of Aleris and the Aditya Birla Group, represented by its North America subsidiary Novelis, reportedly reached an agreement over the extent of responsibility both sides will bear to pass the scrutiny of the Committee on Foreign Investment (CFI).