Merger Agreement Between Zhongwang USA and Aleris Called Off After 15 Months
14 November 2017 by Staff
The fifteen-month-long struggle to merge Aleris Corporation, Inc. and Zhongwang USA, LLC was officially ended yesterday after both parties agreed to terminate the merger agreement and part ways.
A statement released yesterday contained few details other than to point out the merger agreement, which was entered into in August of 2016, was allowed to expire by mutual agreement on Sunday.
Though no individual was identified by name, Zhongwang USA was quoted in the release as being disappointment at the failure to bring the merger to fruition.
“Through the proposed acquisition, the Company was committed to preserving American jobs and investing substantial funds into Aleris, beyond the purchase price. The Aleris acquisition was a win-win opportunity for American workers and Zhongwang USA, particularly in Kentucky, Ohio, Michigan, and Iowa, where Zhongwang’s substantial additional capital investment would increase productivity and American competitiveness while supporting in excess of 1,000 new jobs across four states.”
The company continued by complimenting Aleris and its management team.
“Although deeply disappointed by the outcome, this has been a constructive process for Zhongwang USA, and our executives have tremendous respect for the management and workers at Aleris — they are a world-class team.”
Although the deal seemed promising at the outset, regulatory hurdles and opposition from American aluminium firms doomed the merger from the start. Perhaps the biggest obstacle to closing the deal came from the Committee on Foreign Investment in the United States (CFIUS), a federal government body that reviews foreign investments in domestic firms, and determines whether those potential investments may impact national security.
Though not directly mentioned by the Trump administration, the merger deal came at a time of increased tension between Washington and Beijing, as the incoming U.S. president has spent much of his time in office ratcheting up pressure on the People’s Republic of China over what many in America perceive as an unfair trading landscape between the two countries.
In addition to failing to pass muster with the United States government, the Zhongwang/Aleris union met an icy reception from much of the American aluminium industry, domestic labor unions, and American lawmakers.