Tuesday, November, 19, 2019 06:28:59

Hindalco to continue with its acquisition of Aleris despite US lawsuit

  • The US justice department filed a lawsuit against Novelis’ purchase of Aleris Corp, for $2.6 billion.

  • Novelis Inc. intends to complete the proposed transaction by 21 Jan, 2020.

Novelis Inc., a subsidiary of Hindalco Industries Ltd under Aditya Birla Group said that it has reportedly been planning to close the acquisition of Aleris Corp. that it had proposed notwithstanding the lawsuit filed by US Department of Justice to block the deal.

Novelis, a leading firm in beverage can recycling and aluminum rolling, stated that the company aims to defend itself against the challenge imposed by the US Department of Justice and that it believes holds no merit. The company aims to enter into arbitration to settle dispute with the Department of Justice. Novelis will also consider offering concessions if the arbitration does not work. Novelis emphasized that it will be closing the transaction by 21 Jan, 2020, which is an outside date according to the original merger agreement.

According to reliable sources, the Justice Department in the US reportedly filed a lawsuit intending to stop the proposition laid down by Novelis Inc., for the purchase of Aleris Corp. for $2.6 billion owing to the concerns regarding the high prices of aluminum sheet that is used to make cars.

The Department of Justice stated that the deal will be combining two major producers of aluminum in North America that is used to make automobile bodies. The institution also said that the Aleris in Ohio is an aggressive competitor and the deal would be giving Novelis nearly 60% of its domestic capacity.

Novelis protested the lawsuit filed by the justice department stating that it has ignored its competition from the steel automotive body sheet, despite the product being used for around 90% of the market. Novelis commented that its merger with Aleris will not threaten anyone but will strengthen its ability to meet the growing demand for aluminum, compete against steel, support its sustainability platform around the world and achieve its recycling goals.

 

Source Credit- https://www.livemint.com/companies/news/hindalco-says-committed-to-aleris-acquisition-despite-us-lawsuit-1567658175359.html