The approval is conditioned upon the sale of Aleris' plant in Duffel, Belgium, which produces aluminum for the automotive and specialties markets. Novelis is working to market the plant to potential buyers, with the chosen counterparty and the definitive agreement for divestiture subject to European Commission approval, according to a news release.
The U.S. Department of Justice (DOJ) filed a lawsuit in September aimed at stopping Novelis' proposed $2.6 billion purchase of Aleris Corp. because of concerns about higher prices for aluminum sheet used to make cars. Novelis is part of the Mumbai-based Aditya Birla Group.
With this conditional approval in the European Union, as well as a clear path forward for approval in the U.S., Novelis says it continues to work closely with the Chinese State Administration for Market Regulation (SAMR) to receive its approval.
"Today's announcement is another step forward in bringing Novelis and Aleris together, which will benefit our customers, employees and the aluminum industry as a whole," says Steve Fisher, president and chief executive officer of Novelis. "Overall, this transaction will strengthen our ability to compete against steel in the automotive market, meet growing customer demand for aluminum, achieve our recycling goals and bolster our sustainability platform worldwide. In addition, it will further enhance our strategic position in Asia and diversify our overall product portfolio."
The company says it expects to close the transaction by Jan. 21, 2020, the outside date under the merger agreement.