Subsidiary of Aditya Birla-led Hindalco: ‘US DOJ move to block Aleris deal without merit’

Raising objections to the deal, the department on Wednesday said the lawsuit of the antitrust division alleges that the transaction would combine two of only four North American producers of aluminum auto body sheet. Calling Ohio-based Aleris an ‘aggressive competitor’, the lawsuit alleges that “if this deal were allowed to proceed, Novelis would lock up 60% of projected total domestic capacity and the vast majority of uncommitted capacity, enabling the company to raise prices, reduce innovation and provide less favourable terms of service to the detriment of automakers and ultimately American consumers.”

However, in response to the DOJ lawsuit, Novelis has said the lawsuit challenging the Aleris acquisition is without merit. Novelis said the lawsuit ignores the full scope of automotive body sheet competition as it is based on the contention that the only relevant competition among automotive body sheet providers is among aluminum manufacturers such as Novelis and Aleris. The company said the department ignores competition from steel automotive body sheet, even though steel automotive body sheet is currently used for nearly 90 per cent of the market.

Once complete, the acquisition will create a $21-billion company by revenue. —FE