US proposes Novelis to divest automotive body sheet biz in North America

US proposes Novelis to divest automotive body sheet biz in North America

By Lalit K JhannWASHINGTON: The US Department of Justice is proposing a federal court to order Hindalco-owned American company Novelis to divest Aleris Corporation’s entire aluminium automotive body sheet operations in North America to satisfy competitive concerns.nnNovelis, which is a wholly-owned subsidiary of India’s Hindalco Industries, had acquired Aleris for USD 2.8 billion last month.nnAs per a mutually reached settlement, Novelis is required to divest the automotive body sheet business in North America, which is just one plant in Lewisport.nnPTI had previously incorrectly stated that the US has proposed Hindalco-owned Novelis to divest investment in Aleris. The Department of Justice has only proposed Novelis to divest the automotive body sheet business in North America. The divestiture was announced by the company when it had closed the Aleris acquisition.nnThe company, reacting to earlier PTI story, stated that it was “factually incorrect”.nn”As communicated earlier, the DoJ and Novelis have already agreed on divestiture of Aleris’ automotive body sheet business in North America, which is in Lewisport,” it said.nnIn a press statement, the Department of Justice said: “It has filed a proposed final judgment with the US District Court for the Northern District of Ohio requiring Novelis Inc to divest Aleris Corporation’s entire aluminum automotive body sheet operations in North America to satisfy the Department’s competitive concerns with Novelis’s acquisition of Aleris”.nnPrior to its acquisition by Novelis, Aleris was a Delaware corporation headquartered in Cleveland, Ohio. Aleris offers flat-rolled aluminum products to the automotive, aerospace, building, and construction industries among others.nnNovelis is a Canadian corporation headquartered in Atlanta, Georgia. It offers flat-rolled aluminium products for automotive, beverage can, and specialty segments.nn”Today’s proposed divestiture preserves competition in the market for aluminum automotive body sheet and protects automakers and American consumers by requiring the full divestiture of Aleris’ North American aluminum automotive body sheet operations,” Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division said on Tuesday.nnIn 2018, Aleris’ revenues were approximately USD 3.4 billion.nnThe proposed final judgment follows the US’ March 9 arbitration win.nnPrior to filing its civil antitrust lawsuit to block the merger, the Department’s Antitrust Division reached an agreement with Novelis and Aleris to refer the matter to binding arbitration if Novelis and Aleris were unable to resolve the US’ competitive concern with the transaction.nnUnder the arbitration terms, Novelis agreed to divest Aleris’ aluminum automotive body sheet operations in North America if the US prevailed in the arbitration.nnThe arbitrator ruled in favour of the United States, holding that aluminum automotive body sheet constitutes a relevant antitrust product market. On Tuesday, the department filed a proposed final judgment that, if approved by the court, would fully resolve the competitive harm alleged in the lawsuit.nnThe Aditya Birla Group flagship Hindalco cemented its position as the world’s largest producer of value-added aluminium products with the completion of the USD 2.8 billion acquisition of Aleris by its wholly-owned US subsidiary Novelis Inc last month.nnThe acquisition of the US-based rolled products major Aleris Corporation positions Hindalco as one of the world’s largest aluminium companies, with a global footprint spanning 49 manufacturing facilities in North America, Europe and Asia, the group said in a statement in April.nnSource: Press Trust of India

Leave a Reply

Your email address will not be published.