An industrial aluminum company headquartered in Atlanta, Georgia, recently received approval of its proposed acquisition of an Ohio-based aluminum rolled products producer, which would increase its capacity to provide lightweighting materials for the automotive market.
The European Commission announced approval for Novelis Inc. to acquire Aleris Corporation, conditioned upon the sale of Aleris’ plant in Duffel, Belgium, which produces aluminum for the automotive and specialties markets. Novelis is working expeditiously to market the plant to potential buyers, with the chosen counterparty and the definitive agreement for divestiture subject to European Commission approval.
With this conditional approval in the European Union, as well as a clear path forward for approval in the U.S., Novelis focuses on obtaining approval from the Chinese State Administration for Market Regulation (SAMR).
Steve Fisher, president and CEO, Novelis Inc
“Today’s announcement is another step forward in bringing Novelis and Aleris together, which will benefit our customers, employees, and the aluminum industry as a whole,” said Steve Fisher, president and CEO, Novelis Inc. “Overall, this transaction will strengthen our ability to compete against steel in the automotive market, meet growing customer demand for aluminum, achieve our recycling goals, and bolster our sustainability platform worldwide. In addition, it will further enhance our strategic position in Asia and diversify our overall product portfolio.”
The company expects to close the transaction by January 21, 2020, the outside date under the merger agreement.
A global aluminum rolling manufacturer recently reaffirmed its commitment to complete the acquisition of an Ohio-based aluminum rolled products producer, despite a U.S. Department of Justice (DOJ) lawsuit to block the transaction.
Novelis Inc. gave this statement regarding its proposed acquisition of Aleris Corporation, stating the company “intends to vigorously defend against the DOJ’s challenge”, believing it to be “without merit.”
The “acquisition will strengthen the aluminum industry’s ability to compete against steel in U.S. automotive body sheet market,” notes a release from Novelis.
Steve Fisher, President and CEO, Novelis Inc
“The DOJ lawsuit is based on the contention that the only relevant competition among automotive body sheet providers is that among aluminum manufacturers such as Novelis and Aleris. It ignores competition from steel automotive body sheet, even though steel automotive body sheet is currently used for nearly 90 percent of the market.”
“The day-to-day reality of the automotive body sheet market is aluminum automotive body sheet striving to take share from steel, and the steel automotive body sheet companies fighting back,” said Steve Fisher, president and CEO, Novelis Inc. “We are disappointed that the DOJ has missed this, but also confident that in the next phase of this process the full scope of the competition we face will be recognized appropriately. Our merger with Aleris threatens no one, and to the contrary will strengthen our ability to compete against steel, meet growing customer demand for aluminum, achieve our recycling goals, and bolster our sustainability platform worldwide.”
Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division
The Department of Justice filed the civil antitrust lawsuit seeking to block Novelis’s proposed acquisition of Aleris “in order to preserve competition in the North American market for rolled aluminum sheet for automotive applications.”
The Antitrust Division’s lawsuit alleges that the transaction would combine two of only four North American producers of aluminum auto body sheet.
“Automakers increasingly need aluminum auto body sheet to satisfy American consumers’ demand for larger vehicles that are lighter and more fuel-efficient. The loss of a competing supplier of aluminum auto body sheet ultimately would harm American car buyers,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division.
The Antitrust Division has agreed with defendants to refer the matter to binding arbitration should certain conditions be triggered. The arbitration would resolve the issue of product market definition. This would mark the first time the Antitrust Division is using this arbitration authority to resolve a matter.
“This arbitration would allow the Antitrust Division to resolve the dispositive issue of market definition in this case efficiently and effectively, saving taxpayer resources,” said Delrahim. “Alternative dispute resolution is an important tool that the Antitrust Division can and will use, in appropriate circumstances, to maximize its enforcement resources to protect American consumers.”
According to legal analysts for corporate law firm Jones Day, “Most DOJ merger challenges have taken more than five months from filing of a complaint to a district court decision.”
“For this reason, the parties may have believed that pursuing arbitration on market definition—a topic that in traditional litigation can consume significant time for discovery and briefing—would provide them with deal certainty sooner than litigation. DOJ, in turn, may have viewed the decision as consistent with its larger policy goal of streamlining the merger review process.”
An Atlanta-based provider of aluminum rolling and recycling recently announced the company has signed a definitive agreement to acquire Aleris Corp., Cleveland, a global supplier of rolled aluminum products supplier based in Cleveland, Ohio.
Steve Fisher, President and CEO, Novelis Inc
Novelis Inc. will acquire Aleris Corp’s 13 manufacturing facilities across North America, Asia, and Europe, including new automotive finishing lines in Lewisport, Kentucky, and significant auto capacity in Duffel, Belgium, providing a more diverse product portfolio, including aerospace, automotive, building and construction, commercial transportation and specialty products.
“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. “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.”
As part of the acquisition, Novelis will acquire Aleris’ 13 manufacturing facilities across North America, Asia and Europe. Aleris’ new automotive finishing lines in Lewisport, Kentucky, of which a significant amount of its capacity is already under contract, along with auto capacity in Duffel, Belgium, will allow Novelis to further diversify its global footprint and customer base.
Kumar Mangalam Birla, chairman of the board of directors of Novelis Inc. and chairman of the board of directors of Hindalco Industries Limited
A global aluminum producer announced recently that an investment in a continuous annealing solution heat (CASH) treatment line will contribute to doubling its automotive aluminum body sheet capacity at its Changzhou facility in China.
Novelis Inc states that the approximately $180 million investment, which will also include a high-speed slitter as well as a fully automated packaging line, will add approximately 100 kilotonnes (over 220 million pounds) of capacity. This will enhance Novelis’ ability to supply innovative aluminum solutions to its global automotive customer base as well as Chinese domestic producers. Novelis expects to begin expanding its existing facility in 2018 in order to be operational by 2020.
“By adding another strategic asset to expand its operations in China, Novelis continues to leverage the strength of the Aditya Birla Group as the global leader in aluminum rolling,” said Kumar Mangalam Birla, chairman of the board of directors of Novelis Inc. and chairman of the board of directors of Hindalco Industries Limited. “Investing ahead of projected customer demand enables Novelis to offer premium products and a reliable supply chain to automakers as they continue to adopt more automotive aluminum.”
Steve Fisher, President and CEO, Novelis Inc
“As our customers continue to see aluminum as the material of choice to meet their lightweighting and performance goals, Novelis is strengthening its leadership position in the world’s largest automotive market place,” said Steve Fisher, President and CEO, Novelis Inc. “We believe China’s commitment to fuel efficiency and reducing emissions represent a large and favorable opportunity that will require greater adoption of aluminium, particularly in the rapidly growing electric vehicle market.”
This is Novelis’ second automotive investment this year, having recently announced a $300 million greenfield manufacturing facility in Guthrie, Kentucky, USA.
Heat treatment processes are among the operations planned at an automotive aluminum sheet manufacturing facility in Guthrie, Kentucky, where a gathering of business and government officials celebrated a groundbreaking this week.
Steve Fisher, president & CEO, Novelis Inc.
Representatives from Novelis, the world leader in aluminum rolling and recycling, were joined by local and state officials to recognize the investment of a 400,000 square foot, $305 million facility that will create approximately 125 jobs and produce annual nameplate capacity of 200,000 metric tons. The facility will include heat treatment and pre-treatment lines for use in vehicle parts such as body-in-white, hoods, doors, lift gates and fenders. Novelis will begin producing automotive aluminum at the site in 2020.
“The increased adoption of aluminum in cars, trucks and SUVs, coupled with more automotive manufacturing plants in the southeast makes Guthrie a strategic location to serve our customers,” said Steve Fisher, president and CEO, Novelis Inc. “With the strong, highly-skilled workforce in Kentucky, we believe our culture and commitment to building a sustainable world together will have a lasting and positive impact on this community.”
The significant positive impact of tax reform in the U.S. reinforces Novelis’ decision to expand at this time. A favorable economic environment has enabled Novelis to recently finalize key contracts totaling approximately $60 million for engineering plans, site preparation and state-of-the-art equipment for the greenfield facility. Senator Rand Paul, Congressman James Comer, Governor Matt Bevin and Senator Mitch McConnell’s staff were present at the groundbreaking ceremony.
Paul Banks, a 25-year veteran of the aluminum rolling industry, will oversee the project as Plant Manager, having previously served as Unit Manager at Logan Aluminum, a Novelis joint venture in nearby Russellville, Kentucky.
