Hindalco, which reported a mixed set of Q2 results with a slight miss in its aluminium business is in the final lap of completing its large acquisition of Aleris Corp, which requires anti-trust approvals from the US, Europe and China. However, the company has been asked to sell the Belgian unit of Aleris to get the nod.
Managing Director of Hindalco Satish Pai, speaking about the rationale of the deal, said the Duffel’s plant divestment will not materially change the contours of the Aleris acquisition. "In Europe, we already have auto capacity. Our acquisition strategy in Europe was to get Koblenz, which is the aerospace plant. As long as the proceeds from Duffel’s are commensurate with the EBITDA that Duffel’s generates, the acquisition will not be materially impacted,” he told CNBC-TV18.
Talking about the US approval and arbitration issue, he said the company was confident of winning the arbitration in the US and do not expect divestiture of Louis Port. It also expects approval from the Chinese authorities for Aleris acquisition in the near future.
Throwing more light on the can and auto business, he said: “We wanted to diversify our portfolio and not necessarily move away. The can business is booming because of the anti-plastic movement - the demand for can is going up much more than expected. So, we want to expand our capacity going forward.”
The outlook for aluminium business looks better on the back of LME improvement and better cost of production. The copper business suffered in terms of volumes in Q2 on account of heavy rains but in Q3 and Q4 the production will be back to normal rate.