Novelis Inc., headquartered in Atlanta, has sold the former Aleris plant in Duffel, Belgium, to Alvance, the aluminum business owned by London-based GFG Alliance.
Previously, the European Commission and Chinese State Administration for Market Regulation determined that Novelis' acquisition of Aleris, which closed earlier this year, could proceed on the condition that Novelis divest the Duffel plant to a third party that met certain buyer suitability requirements. Both regulators have approved Alvance as a suitable buyer and have permitted the sale to be completed, Novelis says in a news release about the sale.
In November 2019, Paris-based Alvance agreed to acquire the Duffel facility for 310 million euros, or roughly $363 million. At closing Sept. 30, Novelis received 210 million euros in cash, or roughly $246 million. The parties have agreed to a postclosing arbitration process regarding the payment of the remaining 100 million euros (roughly $117 million).
The Aleris acquisition provides a strong proforma financial profile for Novelis with many strategic benefits and continues to be value accretive, with the long-term outlook in line with the original acquisition case, according to the company.
The Duffel facility features the widest automotive cold-rolling mill in Europe and a continuous annealing line with pretreatment. The plant supplies aluminum for architecture and design, automotive and industrial applications.
The plant, to be renamed Alvance Aluminium Duffel, employs approximately 1,000 people and annually produces 200,000 tons of aluminum rolled products.
Alvance says the acquisition of the plant significantly expands the company's downstream portfolio of value-added, sustainable aluminum products to the automotive sector and other industries.
The company says it plans to increase the facility's production capacity by significantly investing in the modernization of its production equipment. Duffel also will benefit from synergies with Alvance Aluminium Dunkerque, Europe’s largest aluminum smelter, which will include a direct supply of high-quality primary aluminum, according to Alvance.
With the closing, a 100-day review program began during which Alvance, working with the Duffel management, trade unions, customers and suppliers, says it will complete a comprehensive analysis of the businesses to explore investment opportunities and develop detailed plans to boost its competitiveness, extend product range and support sales growth. The company also will explore how Duffel will play a key role in GFG and Alvance's vision to be carbon neutral by 2030.
Duffel also adds to GFG’s drive to maximize “closed loop” operations across its value chain where waste or scrap products are either recycled by the site that produces them or by another plant within the group, lowering the carbon footprint of the business and extracting even more value from the process, the company says. Duffel already recycles a large proportion of its own scrap and will expand recycling to include any potential synergies with customers and group sites, such as Dunkerque.
GFG Alliance Executive Chairman Sanjeev Gupta says, “I would like to welcome the Duffel team to the family of GFG Alliance companies. Today marks yet a further milestone in our European investment journey and a step closer to our aim of establishing an end-to-end international low-carbon aluminum champion creating high-value products and sustaining high-value jobs.
“Duffel is a premium operation with a highly-skilled workforce," he adds. "It is a market leader in body sheet production with potential to expand its capacity widen its customer offerings. We see that asset strength with potential and want to help drive expansion.”
Alvance Chief Executive Officer Arnaud de Weert says, “Alvance is clearly a leader in offering low-carbon and high-quality aluminum product to a growing market. We are building a new aluminum business at a time when other aluminum producers are leaving Europe for lower-cost territories. We believe that our growing aluminum value chain based on low carbon production of a high-quality material with proximity to our customers can not only compete with products from further afield but outclass them. I’m delighted to welcome the workers at Duffel to join the Alliance on its journey to realize our vision together.”
Managing Director of Alvance Aluminium Duffel Geert Vannuffelen says, “We are delighted to be joining both Alvance and the GFG Alliance and are very excited to help drive the company’s expansion plans. Duffel is on a path to create valuable opportunities for our employees and partners. As a business, we fully support Alvance's vision and ambitions for sustainable value-added aluminum and are proud to say that we see a strong correlation between Duffel’s values today and GFG Alliance’s own core values. We believe that, as part of Alvance, we will have the support to develop our site in a sustainable way and in so doing provide an even better service to our customers.”