EU regulators investigate Novelis’ proposed purchase of Aleris

According to published reports, European Union antitrust regulators have opened an investigation into Novelis’ proposed $2.6 billion purchase of Aleris. Novelis, part of the Mumbai-based Aditya Birla Group, is based in Atlanta and has an integrated network of rolling and recycling facilities across North America, South America, Europe and Asia. Aleris is based in Cleveland and has manufacturing facilities in the U.S., China and Europe.

The EU’s Antitrust Chief Margrethe Vestager says the regulators’ intent is to ensure competitiveness in the value-added aluminum market. “Our in-depth investigation aims to ensure that the acquisition of Aleris by Novelis does not have a negative impact on effective competition in aluminum markets and does not lead to less choice and higher prices for European industrial customers.”

Under the terms of the deal, which was announced last summer, Novelis would acquire Aleris’ 13 global manufacturing facilities, including melt shops that consume aluminum scrap in Davenport, Iowa; Lewisport, Kentucky; Uhrichsville, Ohio; and Richmond, Virginia.

The acquisition also would include Aleris’ new automotive finishing lines in Lewisport, which has a significant amount of its 200,000 metric tons of capacity already under contract, and 100,000 metric tons of auto capacity at Aleris’ facility in Duffel, Belgium.

The purchase also would increase Novelis’ operations in China, according to the company. Aleris’ Zhenjiang, China, facility is near Novelis’ existing Changzhou plant, which could provide greater opportunity for customer collaboration, according to Novelis.

The Novelis bid for Aleris followed an unsuccessful bid in 2017 by investors associated with Chinese aluminum producer Zhongwang Holdings Ltd.