Aluminum recycler and rolling company Novelis Inc., Atlanta, has announced that the arbitrator assigned to resolve its dispute with the U.S. Department of Justice (DOJ) regarding its purchase of Cleveland-based aluminum company Aleris has ruled that aluminum and steel are not in the same relevant product market for automotive body sheet (ABS) under antitrust laws. As part of its agreement with the DOJ, Novelis must divest Aleris' Lewisport, Kentucky, plant. However, Novelis can close the acquisition prior to divesting those assets once it obtains European Commission (EC) approval of the buyer for Aleris' plant in Duffel, Belgium, the company says.
"This decision ignores the reality of the automotive body sheet market and the competition we have faced against steel for years,” says Steve Fisher, president and CEO of Novelis Inc. “Aluminum remains the material of choice for our customers, and we are going to continue to provide them with the innovative, lightweight and sustainable solutions they demand. We are moving forward with the acquisition of Aleris to realize the many benefits this transaction will bring to our employees, customers and the aluminum industry as a whole."
Novelis says it will work to divest Aleris' North American automotive business, including the Lewisport, Kentucky, plant, but can close the acquisition prior to divesting those assets.
To close its acquisition of Aleris, Novelis must receive EC approval of the buyer of Aleris' Duffel plant. Once that approval is received, the company says it will close the transaction as quickly as possible.
Novelis operates 23 facilities in nine countries, employs approximately 11,000 people and recorded $12.3 billion in revenue for its 2019 fiscal year. It is a subsidiary of Hindalco Industries Ltd., an industry leader in aluminum and copper, and the metals flagship company of the Aditya Birla Group, a multinational conglomerate based in Mumbai, India.