Novelis offers to sell plant in Belgium to address EU concerns in Aleris buy
23 Aug 2019 12:35 pm by Matthew Newman
US aluminum producer Novelis has offered to sell a plant in Belgium to assuage EU antitrust concerns over its plan to buy rival US rolled-aluminum products maker Aleris for $2.6 billion, MLex has learned.
Novelis has proposed selling Aleris’s Duffel plant to a company that has an “industrial vision,” MLex understands.
The offer comes after Novelis argued last month at a closed-door hearing that the divestment isn’t necessary to address competition concerns.
The European Commission opened an in-depth investigation into the deal in March, citing concerns about competition in aluminum automotive body sheets and other aluminum flat-rolled products used, for instance, in the construction industry. The regulator served formal objections on Novelis on July 4.
Novelis has argued that when it comes to competition for automotive products, steel is an important competitive constraint on aluminum.
The company has sought to keep the plant and committed to invest $92 million in it, adding that its stewardship would offer the best guarantee for maintaining the facility's production.
But the EU watchdog has insisted that a “structural” remedy is necessary to counter the deal’s anticompetitive effects. The EU regulator prefers an asset sale to an independent operator able to pose a long-term competitive counterbalance to the Novelis-Aleris combination.
Novelis’ offer also includes a commitment that there will be a transition period for the asset sale together with an investment to acknowledge the degree of the Duffel plant’s integration with Aleris’s German factories in Koblenz and Voerde.
Unions are concerned that a sale to a private-equity investor could put the plants' future at risk. Aleris is owned by investment management firm Oaktree Capital.
Novelis has confirmed that it has offered a remedy to address the commission’s concerns but has provided no additional information.
“The aim is to conclude the transaction by the end of the calendar year,” Novelis spokesman Matt Bianco told MLex.
Novelis is a unit of Indian metals company Hindalco, which trades on the Bombay Stock Exchange.
The commission's case file number is M.9076.
M&A, US HSR filings expected to remain hot through first half of 2021; bankruptcies, volatility a concern29 Dec 2020 12:00 am by Curtis EichelbergerMergers and US antitrust filings are expected to remain strong through the first half of 2021, fueled by acquisitions in the wake of the global pandemic.
19 Oct 2020 10:29 pm by Kirk VictorA recommendation in the House Judiciary Committee’s 452-page report on competition in digital markets is sparking debate.
08 Oct 2020 1:26 pm by Victoria IbitoyeVisa's UK clearance to buy Plaid showed the Competition and Markets Authority to be unafraid of evaluating and dismissing "killer acquisition" concerns.