A.V. Birla acquires US-based Novelis for $6 B
Monday, 12 February 2007, 18:30 IST
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NEW DELHI: India's Aditya Vikram (AV) Birla Group's aluminium arm Hindalco Industries Ltd, Sunday announced its acquisition of US-based aluminium major Novelis Inc. for $6 billion in an all cash deal. "This deal definitely gives a boost to Hindalco's objective of being a global player," Kumaramangalam Birla, chairman, Birla Group told a press conference in Mumbai. Adding that the company has acquired 66.66 percent of Noveslis, Birla said the deal would include $2.4 billion debt. And by the second quarter of 2007 the entire 100 percent of the company will be completed. Novelis Inc., one of the leading aluminium companies of North America, is listed on the New York Stock Exchange and the Toronto Stock Exchange. It is one of the world's largest producers of flat-rolled aluminium. The Atlanta-based firm enjoys blue chip customers like Coca Cola and Ford Motors. A spun-off from Canadian aluminium major Alcan, Novelis has 37 manufacturing plants in 11 countries. The deal requires approval from shareholders of two-thirds of the company's total equity capital, officials said. "This deal would double our turnover immediately and will give us access to premium products market," Birla said. According to Debu Bhattacharya, managing director, Hindalco: "The deal would create a globally integrated aluminium company. Hindalco is strong in the general market and after this acquisition, we will be strong in the premium market." Adding that this transaction would affect Hindalco's bottomline negatively in fiscal 2007-08, Bhattacharya said: "I am sure we will bounce back in 2009-10." However, according to officials, there are possibilities for other contenders coming on the scene. "There can always be another bidder but I do not foresee that happening," Birla said. After the magnum opus Tata-Corus deal, this acquisition by the Birla Group marks the second largest by an Indian company abroad.
Source: IANS
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