The arbiter assigned to the dispute between the United States Department of Justice and Atlanta’s rolled and recycled aluminium firm Novelis Inc. determined Aleris must sell its plant in Lewisport, Kentucky to satisfy the department’s antitrust concerns in relation to Novelis’ buy-out.
Earlier this week the arbitrator found that aluminium and steel are not of the same relevant product market for automotive body sheet (ABS) as defined by U.S. antitrust statutes. As a result, Novelis is now bound to the terms of its agreement with the Justice Department to divest the Kentucky plant in the process of purchasing Aleris.
Steve Fisher, President and CEO, Novelis Inc., issued a withering criticism of the decision in a company press release Monday.
“This decision ignores the reality of the automotive body sheet market and the competition we have faced against steel for years. Aluminum remains the material of choice for our customers, and we are going to continue to provide them with the innovative, lightweight and sustainable solutions they demand. We are moving forward with the acquisition of Aleris to realize the many benefits this transaction will bring to our employees, customers and the aluminum industry as a whole.”
Novelis went on to say that it would continue to close the transaction upon receiving approval from the European Commission, which is contingent upon the location of a buyer for Aleris’ plant in Duffel, Belgium, and that the sale could be closed prior to divestiture of the Kentucky plant.
Novelis is a subsidiary of Mumbai’s Hindalco Industries Ltd. Based in Atlanta, the firm accounts for almost half of Hindalco’s consolidated revenue. The world’s largest recycler of aluminium, Novelis conducts operations in ten different countries, employs around eleven thousand people, and reported US$10 billion in revenue for the most recent fiscal year.