Reuters said that the U.S. aluminium roller and recycler Novelis, a subsidiary of Aditya Birla Group, India, has no plans for now to offer concessions on the deal to buy Aleris. The company remains firm despite EU antitrust objections over its US$2.6 billion deal to buy aluminium processor Aleris.
Novelis, a leading supplier to the auto industry announced a bid for Aleris in July last year in order to gain a better foothold in the aerospace industry and other value-added segments globally. Novelis’ biggest acquisition is driven by its diversification strategies into premium markets.
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On Monday, July 2, EU antitrust regulators sent a charge sheet known as a statement of objections to the involved companies. The charge sheet expressed their concerns over the deal, particularly on over its impact of the deal on carmakers. They gave two weeks to the companies to respond to it.
The European Commission started the investigation into the Aleris deal in March, 2019. The commission’s main concern was that the deal may reduce competition in the supply of various semi-finished aluminium products, reducing supplier choice for the buyers. They emphasised that the deal may lead to higher prices for aluminium car body sheets due to lack of competition.
The EU regulators also pointed out that deal may impact the supply and prices of certain aluminium flat rolled products used in the building, construction and floor heating industries. However, in the charge sheet, its main concerns were centering round in the auto industry.
Sources related to the matter said that Novelis will argue in favour of the deal showing that there are enough competitions in the steel and aluminium market and the trends will continue in future. The company does not see the deal to raise prices of aluminium products for the auto industry and other end users. The firm said it will be “working constructively with the commission to conclude its investigation and to closing the transaction in a timely manner.”
The Commission will announce its final decision by Sept 16.
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