Novelis Buys Aleris For US$2.6 Billion

Novelis Buys Aleris For US$2.6 Billion

In a move that will change the global rolled-aluminium landscape, rolled and recycled aluminium firm Novelis Inc. today agreed to the purchase of Atlanta’s rolled-aluminium firm Aleris for US$2.6 billion plus debt.

The merger, which will create a firm with pro-forma revenues of around US$15 billion, is expected to be concluded in 9 to 15 months. The purchase will have Novelis take ownership of Aleris’ 13 manufacturing plants, which are spread across three continents.

Steve Fisher, President and CEO, Novelis Inc., lauded the deal as a brilliant opportunity whose time had come.

“Acquiring Aleris is the right opportunity at the right time as they are set for transformational growth. The significant investments they’ve made in the high-demand, high-value aerospace and automotive segments have resulted in favorable long-term, global contracts. These investments, coupled with a diverse and talented workforce, will add tremendous value to our organization and allow us to deliver the highest quality innovative aluminum solutions to our customers.”

Upon completion, Novelis will be the surviving marque, with the resulting company’s headquarters to be housed in Atlanta. Up to then, the two firms will continue to exist and operate separately while integrating under the Novelis banner.

Sean Stack, Aleris chairman and CEO, expressed his faith in the Aleris people and assets and their contribution to Novelis’s continuing success.

“With the support of our private equity owners, our Aleris team has done an excellent job of implementing our company’s strategic transformation over the past several years. By enhancing our capabilities to serve our customers in high-value industries, we have significantly increased the value of the company. I am confident that our assets and people will continue to thrive and contribute to Novelis’ future success.”

Today’s purchase comes 8 months after a failed attempt by Zhongwang USA to purchase Aleris for US$2.33 billion. The move was met with resistance from several corners and was ultimately recommended against by the CFIUS, spelling the deal’s end. Rumors that Aditya Birla Group, who owns Novelis, were preparing a bid began to emerge soon after the Zhongwang USA deal began to show cracks.