Aluminium giant Novelis has completed the sale of a plant in Belgium to comply with the demands of EU and Chinese regulators following its acquisition of Aleris earlier in the year. Even so, the company has yet to negotiate a final payment.
The former Aleris plant in Duffel has been bought by Alvance, the international aluminium part of the GFG Alliance. A year ago, Alvance agreed a price of EUR 310 million. But at the closing of the deal on 30 September, Novelis received only EUR 210 million in cash and the parties have agreed to arbitration over payment of the remaining EUR 100 million.
The sale was required following rulings by both the European Commission and the Chinese State Administration for Market Regulation. Novelis’ acquisition of Aleris, which closed earlier this year, was allowed on the condition that Novelis divest the Duffel plant to a buyer that met certain suitability requirements. Both regulators have now approved Alvance as an appropriate buyer.
‘The Aleris acquisition provides a strong pro-forma financial profile for Novelis with many strategic benefits and continues to be value accretive, with the long term outlook in line with the original acquisition case,’ the company says.
Similarly, the deal required a divestment in the US after Novelis’ parent company Hidalco was involved in an anti-trust case. The Lewisport, Kentucky facility is being sold but the process has been hampered by the coronavirus crisis.
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