Novelis Delays Completion Of Aleris Buyout By Three Months
Novelis expects to complete the acquisition of Aleris in the fourth quarter of calendar year 2019.
Profit of Novelis Inc., the U.S.-based downstream subsidiary of Hindalco Industries Ltd., jumped in the quarter ended June even as it delayed completion of its acquisition of Aleris Corp. by three more months.
Profit—excluding special items—rose 26 percent year-on-year in the first quarter, mainly due to higher operational profit. Billionaire Kumar Mangalam Birla-led company’s Ebitda rose 11.4 percent to $372 million in the corresponding quarter of the previous year.
The operating profit was driven by higher total shipments as well as favourable price and product mix, Novelis said in a statement. This, according to the beverage can maker, was partially offset by less favourable recycling benefits due to lower aluminium prices.
The company’s net sales, however, declined 6 percent year-on-year to $2.9 billion for the first quarter of the financial year 2019-20, driven by lower average aluminum prices and local market premiums, the statement said. This was partially offset by higher total shipments and more favourable product price and mix, it said.
Delay In Aleris Acquisition
Novelis expects to complete the $2.6-billion acquisition of Aleris in the quarter ending December against its earlier target of three months ending September.
This, according to IDFC Capital, implies that the company is working to clinch the deal which may include providing some concessions to offset European Union concerns. The EU had objected to the deal on fears that it could reduce choice for consumers and increase prices, Bloomberg earlier reported.