EU Commission Investigates Novelis’ Plans To Acquire Aleris

The European Commission (EC) said on Monday it has opened an investigation into the US aluminium rolling and recycling leader Novelis’ plans to acquire aluminium product supplier Aleris.

Launching an extensive investigation into the proposed acquisition, the EC said they were concerned that the deal could lead to weaker competition in the supply of various semi-finished aluminium products and eventually disadvantage industrial consumers in the EU.

“Our in-depth investigation aims to ensure that the acquisition of Aleris by Novelis does not have a negative impact on effective competition in aluminium markets and does not lead to less choice and higher prices for European industrial customers,” said the European Commissioner for Competition Margrethe Vestager.

The EC has conducted an initial market investigation and became concerned about the potential transaction given that both companies supply aluminium automotive body sheets. The merger could mean reduced choice in suppliers and higher prices for the metal sheets used in vehicle’s body structure and closures, explained the EC in a statement.

#EUMergerControl Commission opens in-depth investigation into Novelis' proposed acquisition of Aleris. We have concerns that it may reduce competition in the supply of various semi-finished aluminium products, used e.g. by car industry: https://t.co/hjGoa7N8bT pic.twitter.com/nJu7QS1A0K

— EU Competition (@EU_Competition) March 25, 2019

Novelis and Aleris are international manufacturers of aluminium flat rolled products with a significant portion of their facilities based European countries, including Belgium, Germany, Italy, and the United Kingdom. A large number of customers for aluminium automotive body sheets are also based in the EU and need to be able to source cheap sheets to stay competitive in the internal and the international markets. The merger could also affect the supply and prices of certain aluminium flat products used in a variety of sectors, including construction.

Novelis – headquartered in Atlanta (Georgia) – is a subsidiary of Hindalco Industries Limited – an India-based supplier of aluminium and copper. The world’s largest recycler of aluminium, Novelis conducts operations in ten different countries. Aleris – headquartered in Cleveland (Ohio) – is one of the US’s largest privately held companies. Operating in North America, Europe and Asia, Aleris serves diverse industries including aerospace, automotive, and industrial manufacturing.