Hindalco to expand aerospace portfolio through Aleris deal

The company will acquire the global aluminium player for US$ 2.58 billion through its wholly-owned subsidiary Novelis Incorporated.

Hindalco's Canadian arm Novelis has signed a definitive agreement to acquire Aleris for US$ 775 million in cash for the equity component plus the assumption of debt. The deal gives Aleris an enterprise value of US$ 2.58 billion. The deal will close within 15 months post the signing of the agreement and Hindalco will make no contribution to the deal and the entire acquisition will be from the books of Novelis, clarified the company.

This acquisition will provide Hindalco protection from fluctuations in aluminium price and help grow its value-added product business, especially in the speciality aerospace sector. It will complement the company's Asia operations and strengthen the company's capacity to meet automotive demand. Post the acquisition, the company's expected value-added production capacity will be at ~ 4.7 million tonne/annum.

Aleris is a global supplier of aluminium rolled products to the aerospace and automotive sector. The company has good revenue visibility through its multi-year agreements with global blue chip customers.

At 11:34 hours, the stock of Hindalco Industries was at Rs. 213.35 per share, up by 3.29 per cent on Friday.