WASHINGTON (Reuters) - Novelis Inc won antitrust approval for its proposed $2.6 billion purchase of Aleris Corp on condition it divest part of its auto body supply business, the Justice Department said on Monday.
The department sued in September to stop the deal to combine two of the four major North American producers of aluminum to make automobile bodies. Instead of going to trial, the department took the dispute to arbitration, where the government prevailed.
“As a result, Novelis must divest Aleris’s entire aluminum auto body sheet operations in North America, which will fully preserve competition in this important industry,” the department said in a statement.
Those operations are in Aleris’ Lewisport, Kentucky plant, Novelis said in a statement.
Atlanta-based Novelis, a wholly owned subsidiary of Hindalco Industries Ltd, must also reimburse the government for its costs.
Novelis Chief Executive Steve Fisher took issue with the ruling, saying: “This decision ignores the reality of the automotive body sheet market and the competition we have faced against steel for years.”
Fisher said that Novelis would move forward with the proposed transaction.
Reporting by Diane Bartz; Editing by Peter Cooney