Hindalco Novelis is about to close in on a $2.3-2.5 billion acquisition deal of Aleris Corp

Novelis, the US-based downstream arm of India’s largest aluminium producer Hindalco Industries Ltd, is closing in on a $2.3-2.5 billion acquisition of Aleris Corp. 

Talks between both sides are gathering momentum after a lull of over six months, said several people with knowledge of the matter. The discussions are now being steered by Aditya Birla Group chairman Kumar Mangalam Birla himself, they said. He stepped in to lead talks with the private equity owners of Aleris to get negotiations moving again. 

This follows talks of more than a year between China Zhongwang Holdings Ltd,that country’s biggest supplier of processed aluminium, and the Cleveland-based aluminium parts maker having floundered on heightened US national security concerns. 

This follows talks of more than a year between China Zhongwang Holdings Ltd, that country’s biggest supplier of processed aluminium, and the Cleveland-based aluminium parts maker having floundered on heightened US national security concerns. 

A formal announcement is expected in the next few days, possibly as early as the coming week. Spokespersons of both the Aditya BirlaNSE -0.37 % Group and Aleris declined to comment on what they regarded as market speculation. 

“There are no other serious buyers in fray but the talks have been going nowhere even though both sides have been engaged for months, forcing the sponsors to get into the act themselves and resolve it either way,” said an official directly involved on condition of anonymity.

To be sure, Aleris refinanced more than $1 billion of its debt earlier this year, moderating the urgency for a deal. 
Investment banking sources said Hindalco has already held informal discussions with global banks for financing support that would be required if a deal was reached. 

The last time Birla attempted anything this bold was when he paid $5.7 billion for Novelis, the company he’s using now to buy Aleris, 11 years ago. Goldman Sachs is advising the Aditya Birla Group.