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Novelis acquires Aleris to meet automotive aluminum demand, increase Asian footprint
August 08, 2018
Source: ASM International
Novelis Inc., Atlanta, announces it has signed a definitive agreement to acquire Aleris Corp., Cleveland, for approximately $2.6 billion including the assumption of debt. Included are 13 manufacturing facilities across North America, Asia, and Europe, new automotive finishing lines in Lewisport, Kentucky, and 100 kt of auto capacity in Duffel, Belgium, as well as the Zhenjiang facility located near Novelis' existing Changzhou plant.
The fully debt-funded acquisition is designed to diversify Novelis’ product portfolio, strengthen its ability to compete against steel, and integrate complementary assets in Asia, including recycling, casting, rolling and finishing capabilities. The company serves various markets including aerospace, beverage can, building and construction, and commercial transportation, but noted increasing demand from the automotive sector.
Subject to customary closing conditions and regulatory approvals, the acquisition is expected to close in 9-15 months. Until the closing, the companies will continue to operate as separate entities. Following close, the two companies will integrate Aleris into Novelis, which will remain headquartered in Atlanta.
According to Devinder Ahuja, Senior Vice President and Chief Financial Officer of Novelis, "The pro forma net debt to Adjusted EBITDA is forecast to peak below 4x at closing, and return to 3x in approximately two years." The combined company will have pro forma revenues of approximately $15 billion and will operate 37 facilities, across 11 countries, with an employee base of approximately 16,500.
The photo shows Aleris aluminum panels on the International Conference Center in Dalian, China.
Industries and Applications | Automobiles and Ground Transportation
Industries and Applications | Buildings and Infrastructure
Metals and Alloys | Aluminum