Zhongwang USA to buy US aluminum company Aleris Corp in $2.33 bn deal
30 August 2016
Zhongwang USA LLC, a company majority-owned and led by Liu Zhongtian, founder of China Zhongwang Holdings Ltd, yesterday struck a deal to buy US aluminum company Aleris Corp in a $2.33 billion deal.
Zhongwang USA is buying Aleris from private equity firms Oaktree Capital Management, Apollo Management, and Sankaty Advisors.
Under the terms of the deal, Zhongwang USA will pay $1.11 billion in cash and assume Aleris debt of $1.22 billion.
Post closing, Aleris will retain its name and continue to be headquartered in Cleveland, Ohio. It will be operated as an independent entity and run by the current management team.
Aleris manufactures aluminum rolled products and sells it to diverse industries including aerospace, automotive, defense, building and construction, commercial transportation, packaging, and consumer goods.
It has 14 plants worldwide, employs 5,000 people and generates annual revenue of around $3 billion.
It is currently spending $400 million in expanding its facility in Lewisport, Kentucky to ramp up production of aluminum sheet for car and truck makers.
Aleris's facility in Zhenjiang, China serves the aerospace sector, and is licensed to supply Bombardier, Boeing and Airbus Group.
Zhongwang USA is an investment company majority-owned by Liu Zhongtian through Zhongwang International Group Ltd, parent company of China Zhongwang.
Hong Kong Stock Exchange-listed China Zhongwang is the world's second largest industrial aluminum extrusion developer and manufacturer.
The deal will give China Zhongwang access to US auto makers, who are increasingly relying on aluminum instead of steel to reduce body weight of automobiles for fuel efficiency.
Then deal The deal could attract scrutiny from the US Committee on Foreign Investment (CFIUS), which can block overseas companies from buying US firms on national security grounds.
But although CFIUS had in the past blocked several Chinese deals, it had last week approved China National Chemical Corp's $43 billion proposed acquisition of Swiss seed giant Syngenta AG.