Novelis Inc. completed its acquisition of Aleris Corporation, a global supplier of rolled aluminum products, for $2.8 billion. The purchase includes 13 plants across North America, Europe, and Asia — expanding Novelis’ flat rolled aluminum capabilities and enabling it to meet increasing customer demand for aluminum.
“The Aleris deal marks a major milestone for Novelis, on its 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,” said Kumar Mangalam Birla, chairman of Novelis Inc. and the Aditya Birla Group. “The Aleris deal crucially enables the further diversification of our metals portfolio into other premium market segments, most notably aerospace.
First announced in mid-2018, the acquisition provides Novelis with the opportunity to expand its manufacturing portfolio. In particular, it positions the company to more efficiently serve the growing Asia market by integrating complementary assets in the region including recycling, casting, rolling, and finishing capabilities. The company will also add aerospace to its portfolio.
Through the acquisition, Novelis will also enhance its ability to bring innovative products to market by strengthening its research and development capabilities and delivering on its purpose of shaping a sustainable world. In addition, Novelis will gain a more skilled and diverse workforce, which will contribute to the company’s commitment to safety, sustainability, quality, and partnership.
“Today is a transformational moment in our company’s history, and I’ve never been more confident in our ability to deliver even more value to our customers, colleagues, and the communities where we live and work,” said Steve Fisher, president and CEO, Novelis Inc. “With a world-class workforce, a presence in the most competitive and technically demanding end-markets, and the ability to deliver rapid, adaptive and sustainable solutions, Novelis will be able to even better serve our customers.”
In order to complete the acquisition Novelis was to obtain regulatory approval from the U.S., Europe, and China. In order to satisfy these conditions, the company is required to divest two Aleris plants, located in Lewisport, Kentucky, and Duffel, Belgium.
Novelis received approval from the European Commission for the proposed sale of the company’s Duffel facility to Liberty House Group, part of the Gupta Family Group. Under its newly formed aluminum company, ALVANCE, Liberty House plans to buy the mill for €310 million.
The company is still working to divest the Lewisport automotive rolled products facility.
“Periods of turmoil have historically seen the emergence of champions, powered by quality leadership and sound business fundamentals. [The Aleris deal] is a long- term strategic bet, much like Novelis was in 2007,” said Birla. “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 aluminum portfolio, we have taken a decisive step towards a more sustainable future.”