One of the biggest mergers in the aluminum industry took place between Hindalco and Novelis. This deal made Hindalco one of the leading players in the global aluminum industry. The deal inclusive of all debts was valued approximately at 6 billion US dollars.
The benefits to Hindalco from this deal were increase in its global presence and access to the most advanced technology in the industry.
The Hindalco Novelis merge
r marks one of the biggest mergers in the aluminum industry. The deal was a significant step in Hindalco's aim of being a premium metals major in the world.In the words of Mr. Kumar Mangalam Birla, the chairman of Hindalco,"The combination of Hindalco and Novelis establishes an integrated producer with low-cost alumina and aluminum facilities combined with high-end rolling capabilities and a global footprint".
|The important aspects of the agreement that was signed on 10th February 2007 between Hindalco and Novelis are - |
- The deal was values at approximately 6 billion US dollars.
- This amount was inclusive of all debts.
- Each share of Novelis was valued at 44.93 US dollars.
This deal was passed by a 99.8% majority of shareholders of Novelis on 10th May 2007, in a special meeting.
The Hindalco Novelis merger was ultimately completed on 1st June 2007. It made Hindalco a very strong player in the global aluminum market. The milestones reached by Hindalco through this deal were -
- Hindalco became the largest aluminum rolling company in the world.
- The deal made Hindalco one of Asia's largest producers of primary aluminum.
- It also made Hindalco India's largest copper producer.
One of the major benefits that accrued to Hindalco from this merger was the increase in its global presence. The management of Hindalco agreed to the fact that the Hindalco Novelis merger would enable them to further internationalize Hindalco's operations. Novelis was the second largest company in aluminum recycling in North America and the leader in production of rolled products in Europe, South America and Asia Pacific. With the takeover, Hindalco now has these glories to itself. The biggest benefit to Hindalco, however, was the access to the most sophisticated and advanced technology in the industry that Novelis had at its disposal.