Sources say Atlanta’s rolled and recycled aluminium firm Novelis Inc. is on the verge of obtaining approval from the European Union for its US$2.6 billion offer to purchase Aleris.
Reuters said anonymous sources claiming inside knowledge revealed to them on Thursday that the linchpin to antitrust approval came with Novelis’ promise to sell the Aleris plant at Duffel, Belgium. Initially offering to boost the plant’s labor force by 80 positions, the sources say regulators instead sought a major concessions package.
Per the unidentified sources, the EU’s concern regarding the Novelis buy out was a possible reduction in competition and resulting rise in prices for automotive aluminium parts.
“We are working constructively with the European Commission with the continued aim of closing the transaction by the end of this calendar year,” responded Novelis to Reuters’ inquiries. “We have no additional comment at this time.”
Representatives from the European Commission declined to comment on the matter. Their final ruling on the deal is expected by early October.
Novelis stated early on in the process that the rationale for the Aleris offer is an effort at capturing a greater share of the aerospace, automotive, beverage can, and construction market for aluminium products. The firm previously addressed speculation of price increases by saying that other aluminium players would step in at lower price points and customers who balk at higher prices would naturally make their way to sellers offering more favorable prices.
Assuming EC approval is obtained, the deal still faces regulatory approval by regulators of the United States and the People’s Republic of China.
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.