Kumar Mangalam Birla’s Hindalco Industries will have to tackle European anti-trust objections on its plan to buy aluminum producer Aleris Corp. to expand as a supplier to the car industry.
Novelis said the European Commission sent it a statement of objections to the proposed purchase. The step “does not pre-judge the final outcome of the process,” the company said on Thursday. The firms will be “working constructively with the commission to conclude its investigation and to closing the transaction in a timely manner.” Regulators said in March that they were worried the deal could lead to less choice for consumers and higher prices for aluminum sheets used to make cars.
The company is likely to argue that it competes with steelmakers for car customers as well as against several European aluminum producers. While the EU usually squeezes concessions out firms where it sees problems, Novelis and Aleris may argue that the deal doesn’t require concessions to win approval.
Tata Steel and ThyssenKrupp AG abandoned their steel joint venture in May shortly before the EU formally vetoed it for risking higher prices for steel customers in the auto industry. It was the sixth deal vetoed by EU antitrust chief Margrethe Vestager. ArcelorMittal SA only won EU approval to buy Italy’s Ilva SpA last year after pledging to divest plants and assets across Europe.
Source: Business-Standard