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Hindalco completes $2.8 bln acquisition of Aleris

Hindalco Industries, the Aditya Birla Group metals flagship, today said it has completed the $2.8 billion acquisition of US-based rolled products major, Aleris Corporation, by its wholly-owned subsidiary Novelis Inc.
The deal, completed almost two years since it was first announced,  positions Hindalco as one of the world’s largest aluminium companies, with 49 plants across North America, Europe and Asia.
“The Aleris deal marks a major milestone for Hindalco and Novelis, on their path to global leadership. The closure of this deal amidst challenging market conditions, reflects our conviction in the Aleris business and its value to our metals portfolio. Periods of turmoil have historically seen the emergence of champions, powered by quality leadership and sound business fundamentals. This is a long-term strategic bet, much like Novelis was in 2007,” said Mr. Kumar Mangalam Birla, Chairman, Aditya Birla Group.
“The Aleris deal, crucially enables the further diversification of our metals downstream portfolio, into other premium market segments, most notably aerospace. Through the creation of an industry champion, we are reinforcing our commitment to our customers, employees and shareholders. At the same time, with this further expansion in our aluminium portfolio, we have taken a decisive step towards a more sustainable future,” he said.
With the addition of Aleris’ operational assets and workforce, Novelis is poised to more efficiently serve the growing Asia market by integrating complementary assets in the region including recycling, casting, rolling and finishing capabilities, Hindalco said in the release.
“The Aleris acquisition takes forward our aluminium value-added products strategy and gives us entry into high-end aerospace. It further insulates Hindalco-Novelis from global price volatility and sharpens our focus on the downstream business. Aleris enhances our strategic position in Asia and also solidifies our position as a leading global metals player, with a stronger presence across the U.S. and Europe as well. I thank the team for closing this important deal," said Mr. Satish Pai, Managing Director of Hindalco Industries.
Besides strategic benefits, the acquisition will generate approximately $150 million in synergies and creates a strong financial profile, the Hindalco release said.
Novelis will acquire Aleris’ 13 plants across North America, Europe and Asia; however, to satisfy regulatory conditions, the company is required to divest Aleris’ plants in Lewisport, Kentucky, U.S.A., and Duffel, Belgium, as announced earlier.
The closing purchase price of $2.8 billion consists of $775 million for the equity value, as well as approximately $2 billion for the assumption or extinguishment of Aleris’ current outstanding debt and a $50 million earn-out payment, Hindalco said in the release.

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