Novelis wins US antitrust approval for Aleris acquisition, with conditions
11 March 2020
Novelis Inc has secured antitrust approval for its proposed $2.6 billion acquisition of Aleris Corp on condition that it divest part of its auto body supply business, the company stated in a release on Monday.
Novelis Inc, the world leader in aluminium rolling and recycling, said the arbitrator assigned to resolve its dispute with the US Department of Justice ruled that aluminium and steel are not in the same relevant product market for automotive body sheet (ABS) under antitrust laws.
As part of its agreement with the DOJ, Novelis must divest Aleris' Lewisport, Kentucky, plant. However, Novelis can close the acquisition prior to divesting those assets once it obtains European Commission (EC) approval of the buyer for Aleris' plant in Duffel, Belgium.
"This decision ignores the reality of the automotive body sheet market and the competition we have faced against steel for years. Aluminum remains the material of choice for our customers, and we are going to continue to provide them with the innovative, lightweight and sustainable solutions they demand," said Steve Fisher, president and CEO, Novelis Inc. "We are moving forward with the acquisition of Aleris to realise the many benefits this transaction will bring to our employees, customers and the aluminum industry as a whole," he added.
The justice department sued Novelis in September to stop the deal to combine two of the four major North American producers of aluminum to make automobile bodies. Instead of going to trial, the department took the dispute to arbitration, where the government prevailed.
“As a result, Novelis must divest Aleris’s entire aluminum auto body sheet operations in North America, which will fully preserve competition in this important industry,” the department said in a statement.
Novelis, the world's largest recycler of aluminum, is a subsidiary of Hindalco Industries Limited, an industry leader in aluminum and copper, and the metals flagship company of the Mumbai-based Aditya Birla Group.
Headquartered in Atlanta, Georgia, Novelis operates 23 facilities in nine countries, and employs approximately 11,000 people. The company reported $12.3 billion in revenue for its 2019 fiscal year.