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01 SEPTEMBER 2017 AL CIRCLE

Aditya Birla Group evaluating takeover bids for Constellium NV and Aleris Corp

EDITED BY : BEETHIKA BISWAS 2MINS READ

According to sources close to the company, Aditya Birla Group is currently looking at growing its aluminium operations overseas by evaluating possible bids for Constellium NV and Aleris Corp. The Indian billionaire Kumar Mangalam Birla is seriously evaluating such possibilities though the group hasn’t yet decided on proceeding with an offer for either of these two businesses.

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Sources also say that the conglomerate might pursue an acquisition through Novelis Inc., a subsidiary of Birla’s Mumbai-listed Hindalco Industries Ltd.

“Hindalco successfully managed to turn around Novelis, which was once considered a white elephant,” Sanjiv Bhasin, an executive vice president at local brokerage India Infoline Ltd., said. “The way forward in the U.S., especially with an expectation of Trump protectionism, is an acquisition,” he added.

Shares of Constellium jumped 8.1% yesterday in U.S. trading closing at the highest level in more than two years. The move has lifted the market value of the company to $1.2 billion. The global producer of aluminium semi-products with headquarters in Amsterdam, Netherlands is drawing takeover interests and weighing various options, according to the sources. Though Ohio-based Aleris had signed a sell agreement with Zhongwang USA LLC for $2.3 billion, the deal is now stuck after national-security concerns were raised by U.S. officials regarding the Chinese bidder.

Hindalco is now focusing on downstream products leveraging on PM’s Make in India programme and boost on infrastructure spending. Its Atlanta-based Novelis unit has a strong balance sheet and is ready to take on any growth opportunities.

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However, no official confirmation has been received from representatives from Constellium, Aleris or Aditya Birla Group. Constellium designs and manufactures innovative and high value-added aluminium products and components for aerospace, automotive and packaging industries. Aleris manufactures rolled aluminium sheets primarily for aerospace at its manufacturing sites in North America, Europe and China.


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EDITED BY : BEETHIKA BISWAS 2MINS READ

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