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Novelis offers EC concessions over Aleris approach
Posted on Monday, 12 August 2019 13:41
Atlanta-headquartered industrial aluminium company Novelis has offered a number of concessions to the European Commission (EC) over its planned acquisition of Ohio-based peer Aleris.
Reuters picked up on a filing on the regulator’s website, saying that no details of the concessions offered have been disclosed as yet.
Novelis agreed to acquire Aleris back in July 2018; under the terms of the deal, it committed to pay USD 2.60 billion for the business, of which USD 775.00 million was in the form of cash, while the balance would be in the form of debt.
At the time of the agreement, the parties said completion would be subject to the green light from regulators.
However, in March of this year, the EC opened an in-depth investigation into the proposed deal, saying a combination of the parties could reduce competition in the supply of various semi-finished aluminium products.
The regulator added that the move would enable Novelis to further reinforce its existing strong market position in the segment.
Despite this, last month people in the know told Reuters the acquiror had no plans to offer any concessions to the EC.
The Reuters report which picked up on the EC filing said the authority now has until 7th October to make a final decision on the matter and will discuss the situation with rivals and customers of both parties.
According to Zephyr, the M&A database published by Bureau van Dijk, the acquisition was the largest targeting an alumina and aluminium production and processing company to have been announced worldwide during the whole of 2018 and is also more valuable than any deal targeting the sector to have been signed off in 2019.
In another sizeable transaction, Shimge Pump Industry Group signed on the dotted line to take over Xinjiang Production Construction Corps Eighth Division Tianshan Aluminium Industry Co for USD 2.54 billion back in March.
Completion of that deal still requires approval from the China Securities Regulatory Commission and the country’s Ministry of Commerce.
© Zephus Ltd