Winter Park, Florida 29/08/2016 - Aluminium rolled products producer Aleris has signed a definitive agreement to be acquired by a subsidiary of China Zhongwang Holdings Ltd in a deal valued at $2.33 billion.
China Zhongwang is the second largest aluminum extruder in the world and the largest in Asia. Zhongwang USA LLC, a company majority-owned by Liu Zhongtian, will pay $1.11 billion in cash and take on Aleris' $1.22 billion in net debt, Aleris said in a release.
Since 2010, Aleris has been owned by investment funds of Oaktree Capital Management, with affiliates of Apollo Management and Sankaty Advisors, owning minority interests.
The transaction is expected to close in the first quarter of 2017 following the customary regulatory approvals and closing conditions.
Aleris will continue to be headquartered in Cleveland, Ohio, and will be operated as an independent entity. It also will retain its name.
"The Aleris management team will remain in place, providing continuity for Aleris employees and customers and supporting the continued implementation of the Aleris strategy," the release said.
"It will continue with the implementation of all strategic growth projects, including its major expansion project in Lewisport, Kentucky, which will enable Aleris to meet the North American automotive industry's growing demand for aluminium auto body sheet," it added.
Aleris has made a number of investments in its rolled products business over the past several years, including the construction of an aerospace plate mill in Zhenjiang, China, a new automotive facility in Duffel, Belgium, and the acquisition of Nichols Aluminum in the US.
But its biggest current project is in Lewisport, where it is upgrading critical equipment and autobody sheet capabilities. That project remains on schedule, with shipments anticipated to commence in 2017.
"This acquisition is an international expansion to establish a complementary business foothold, as I strongly believe in the potential and prospects of Aleris and the aluminium industry as a whole," Liu said in a statement.
"As the company enters the final phase of its Lewisport automotive project, I believe Aleris is well-positioned to capitalize on the positive demand trends we see globally, and I look forward to supporting the Aleris management team in implementing their growth strategies and pursuing continued success with expanded resources and financial and operational flexibility," he added.
In the second quarter, Aleris reported a net loss of $13 million compared to $19 million in the second quarter of 2015.