Cleveland’s Aleris Corporation announced today that it has been purchased by Zhongwang USA LLC, a firm owned by China Zhongwang’s Liu Zhongtian. According to the press release, the purchase price was US$2.33 billion.
Aleris indicated that the purchase price was made up of US$1.1 billion in cash, with the balance being debt. Zhongwang, which is the world’s second largest extruded aluminium producer, will keep Aleris’s headquarters in Cleveland, leave the management team unchanged, and will allow the firm to operate independently, according to the release.
“We are excited about this transition to strategic ownership as it will allow us to accelerate our strategy to expand our capabilities to support the production of high-value advanced materials for the global automotive and aerospace markets, while maintaining our position as a leading supplier to critical regional markets like building and construction,” said President and CEO of Aleris Sean Stack. “We expect the transition to be seamless for our employees and customers, and that the new strategic shareholder will provide us with greater financial flexibility to continue to anticipate and meet the needs of our customers well into the future.”
Aleris has been owned by Oaktree Capital Management, L.P. since it emerged from bankruptcy in 2010. Affiliates of Apollo Management, L.P., and Sankaty Advisors, LLC owned minority interests. The company said it will continue its strategic plans for meeting automotive aluminium demand, including the expansion of its facilities in Kentucky.
“This acquisition is an international expansion to establish a complementary business foothold, as I strongly believe in the potential and prospects of Aleris and the aluminum industry as a whole,” said Liu. “Aleris has a strong management team, talented employees and industry-leading capabilities with a complementary geographic footprint. As the company enters the final phase of its Lewisport automotive project, I believe Aleris is well-positioned to capitalize on the positive demand trends we see globally, and I look forward to supporting the Aleris management team in implementing their growth strategies and pursuing continued success with expanded resources and financial and operational flexibility.”