European Commission starts investigation on the proposed acquisition of Aleris by Novelis

The European Commission announced on Monday that it started an investigation on the proposed acquisition of Aleris by Novelis under the EU Merger Regulation. Commissioner Margrethe Vestager, in charge of competition policy said that the investigation would look into whether the acquisition would reduce competition in the semi-finished aluminium product market. It would also see whether such a merger would lead to less choice and higher prices for European industrial customers as for aluminium automotive body sheets are concerned.

"European industries should be able to access aluminium products at fair prices to be able to compete in global markets,” she said.

Aluminium automotive body sheets customers include European companies operating in the automotive sector. EU would make sure that European industrial customers can source aluminium automotive body sheets at competitive prices, so that they can compete with imported products in the EEA, or export profitably.

The investigation would also look into how the merger would impact the supply of prices of aluminium flat rolled products in the heating and B&C sector.

Novelis, the U.S. subsidiary of India’s Hindalco Industries Ltd, announced it signed an agreement to buy Aleris for $2.6 billion in July 2018, expanding its reach to the aerospace industry and other value-added businesses globally. The acquisition will also strengthen Novelis’ position as an aluminium flat rolled product supplier in the European Economic Area (EEA), as both the companies have production facilities in Belgium, Germany, Italy and the United Kingdom.

The Commission is expected to come to a decision on the acquisition within 90 working days, until August 8. Novelis and Aleris would not submit any commitment till the initial investigations are over.