The plan to acquire US-based aluminium products maker Aleris International for nearly $2.5 billion by billionaire Kumar Mangalam Birla’s flagship Hindalco is likely to be announced this week, sources privy to the developments told CNBC-TV18.
The deal will help Novelis, a privately held Canadian unit of Hindalco, boost its presence in North America and help the group amplify its construction and automotive products.
Earlier, Hindalco and Aleris have reached an agreement on the terms of the deal, the people quoted above said. Hindalco and Novelis are in the process of tying up debt for the deal.
Hindalco is also exploring the option of issuing American Depository Shares (ADR) to fund deal, but there is no concrete decision taken on this yet.
The rationale for the deal is that Aleris is a strategic downstream fit and its presence in North America and facilities in automotive and construction products is also attractive for Novelis.