Sanjeev Gupta’s GFG Alliance said yesterday it has agreed to buy Novelis’s Duffel BVBA aluminium plant in Belgium for an undisclosed sum.
Yesterday’s purchase of the Belgian mill is the latest in a series of aluminium and steel purchases by GFG in recent months and years. The firm purchased Europe’s biggest aluminium smelter in Dunkirk, France from Rio Tinto Group last year for half a billion US dollars, and it became the new owner of the Lochaber smelter in Scotland three years ago.
“The deal is consistent with GFG Alliance’s strategy to create an international, vertically integrated aluminum business,” explained GFG in a statement announcing the acquisition.
Additionally, GFG said the move would help the firm’s bottom line thanks to savings on transportation costs and open up new avenues for research and development. At present the Duffel facility sources a portion of its aluminium needs from GFG’s Dunkerque aluminium smelter.
Meanwhile, the sale aids Novelis in meeting its own ends, as divesting itself of the plant was a condition set by the European Union for approval of Aleris’ US$2.6 billion buyout of the firm, as the EU expressed concerns that the purchase would place too great an aluminium production capacity in the hands of one company.
The Duffel plant produces around 240 thousand metric tons of semi-finished aluminium products, largely for sale to the European automotive industry. Among its bigger clients are Volkswagen and BMW.
GFG said the purchase was still subject to regulatory approval, but it expected the deal to be completed within the next several months.
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.