May 12, 2020 / 11:00 PM / 20 days ago

U.S. proposes divestiture as condition for Novelis purchase of Aleris

WASHINGTON (Reuters) - The U.S. Justice Department proposed on Tuesday that Novelis Inc divest Aleris Corp’s entire North American aluminum auto body sheet operations as a condition of its acquisition.

The Justice Department filed a lawsuit in September seeking to stop Novelis’ $2.6 billion purchase of Aleris because of concerns over higher prices for aluminum sheet used to make cars. An arbitrator ruled in the department’s favor in March.

“Today’s proposed divestiture preserves competition in the market for aluminum automotive body sheet and protects automakers and American consumers by requiring the full divestiture of Aleris’s North American aluminum automotive body sheet operations,” Assistant U.S. Attorney General Makan Delrahim said in a statement.

Novelis, which is U.S.-based but owned by India’s Hindalco Industries, announced last month that it had completed its acquisition of Aleris. The deal was announced in July 2018.

Aleris had previously struck a deal to be purchased by Zhongwang USA, an investment firm backed by a Chinese tycoon, but scrapped it in late 2017 after a national security panel, the U.S. Committee on Foreign Investment in the United States, failed to approve it.

Reporting by Eric Beech; Editing by Mohammad Zargham and Cynthia Osterman

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