India's Hindalco to buy Novelis

The $6b deal is the largest-ever North American acquisition by an Indian company.

    Kumar Manglam Birla said the purchase would push his group into the Fortune 500 list [AFP]

    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.

    SOURCE: Agencies


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