Hindalco Industries Ltd. has tendered an offer to buy Cleveland rolled aluminium firm Aleris International, Inc. for US$2.5 billion according to unnamed sources who spoke to Bloomberg earlier this week.
According to the unnamed sources, the move is part of Kumar Mangalam Birla’s continuing gambit to grow his global industrial footprint. Per the sources, the offer was a non-binding bid submitted via Hindalco’s United States subsidiary Novelis Inc.
The offer comes after a previous attempted buy-out of Aleris by Chinese firm Zhongwang USA, LLC failed to come to fruition. The deal, which was first agreed to by the parties in principle in the fall of 2016, faced significant resistance from both state and industry actors, as Zhongwang USA is majority-owned by Liu Zhongtian through Zhongwang International Group Limited, parent company of China Zhongwang Group. 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. The merger agreement was finally allowed to expire in mid-November of last year.
The unnamed sources went on to say that there were no assurances of a binding offer from Novelis, and that the possibility of other suitors still remains. However, Hindalco has begun conducting due diligence in preparation of pitching a firmer offer.
Representatives from the firms involved offered Reuters no comment upon the deal.
Ranked by Forbes as one of the United States’ largest privately-held companies, Aleris was founded in the Cleveland suburb of Beechwood, Ohio when Commonwealth Industries, Inc. and IMCO Recycling Inc. merged in late 2004. The aluminium rolled products company serves diverse industries including aerospace, automotive, building and construction, commercial transportation and industrial manufacturing and owns fourteen plants held in three business units in North America, Europe, and China. Aleris employed over 6,500 individuals as of 2010.