US Proposes India's Hindalco-owned Novelis to Divest Investment in Aluminium Major Aleris
The US Department of Justice is proposing a federal court to order Hindalco-owned American company Novelis to divest all its stakes in aluminium major Aleris due to the competitive concern with such an acquisition, an official said.
Washington, May 13 (PTI) The US Department of Justice is proposing a federal court to order Hindalco-owned American company Novelis to divest all its stakes in aluminium major Aleris due to the competitive concern with such an acquisition, an official said.
Atlanta-headquartered Novelis offers flat-rolled aluminum products in three segments: automotive, beverage can and specialty products. In the fiscal year ending March 31, 2019, its revenues were approximately USD 12.3 billion.
Novelis is a wholly-owned subsidiary of Hindalco Industries Limited, an Indian company headquartered in Mumbai.
Prior to its acquisition by Novelis, Aleris was a Delaware corporation headquartered in Cleveland, Ohio. Aleris offers flat-rolled aluminum products to the automotive, aerospace, building and construction industries among others.
"Today's proposed divestiture preserves competition in the market for aluminum automotive body sheet and protects automakers and American consumers by requiring the full divestiture of Aleris' North American aluminum automotive body sheet operations," Assistant Attorney General Makan Delrahim of the Justice Department's Antitrust Division said on Tuesday.
In 2018, Aleris' revenues were approximately USD 3.4 billion.
The proposed final judgment follows the US' March 9 arbitration win.
Prior to filing its civil antitrust lawsuit to block the merger, the Department's Antitrust Division reached an agreement with Novelis and Aleris to refer the matter to binding arbitration if Novelis and Aleris were unable to resolve the US' competitive concern with the transaction.
Under the arbitration terms, Novelis agreed to divest Aleris' aluminum automotive body sheet operations in North America if the US prevailed in the arbitration.
The arbitrator ruled in favour of the United States, holding that aluminum automotive body sheet constitutes a relevant antitrust product market. On Tuesday, the Department filed a proposed final judgment that, if approved by the court, would fully resolve the competitive harm alleged in the lawsuit.
The Aditya Birla Group flagship Hindalco cemented its position as the world's largest producer of value-added aluminium products with the completion of the USD 2.8 billion acquisition of Aleris by its wholly-owned US subsidiary Novelis Inc last month.
The acquisition of the US-based rolled products major Aleris Corporation positions Hindalco as one of the world's largest aluminium companies, with a global footprint spanning 49 manufacturing facilities in North America, Europe and Asia, the group said in a statement in April.
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