Hindalco is the flagship company of the Indian conglomerate, the Aditya Birla Group with interests in cement, metals, telecommunication and textiles.
No merger
Birla said:"We plan to retain all Novelis employees and see strong synergies across products, with an edge in research. Though Novelis will be a wholly owned subsidiary, we have no plans to merge it into Hindalco."
He said the transaction was expected to be finalised in the second quarter and included $2.4bn of debt.
The firm is offering $44.93 a share, a premium of almost 17 per cent over Novelis' stock close of $38.5 on Friday.
Novelis is a leader in aluminium products across Europe and Asia, with a presence across 11 countries, with 36 manufacturing facilities and employing 12,500 people.
Its customers include US auto giant General Motors and soft-drinks mammoth Coca-Cola.
Hindalco's managing director Debu Bhattacharya said Hindalco would have taken a decade to build the assets that Novelis possessed.
Birla said the group's sales were expected to nearly double to $20bn from the current $11.8bn.
Post-acquisition, the Birla group will have 50 per cent of its turnover coming from overseas.