The European Commission (“the Commission”) has conditionally approved the acquisition of Aleris by Novelis on the condition of divestiture of aluminum automotive body sheets business of Aleris.
Novelis and Aleris are both global manufacturers of aluminum flat rolled products and have a significant market share in Europe. The competition concern of the Commission was appertaining to aluminum automotive body sheets, which is a separate product other than aluminum products. The Commission found that; the new entity will have very high market shares and hold a large proportion of the manufacturing capacity for aluminum automotive body sheets after the merger. A limited number of remaining competitors are smaller undertakings in terms of manufacturing capacity and they will not be able to get into price competition against the merged entity. Therefore, the Commission reached to the conclusion that the merged entity will cause price increase in aluminum automotive body sheets.
Addressing this competition concern, the parties offered to divest Aleris’ entire aluminum automotive body sheet business in Europe, including its production plant in Duffel Belgium, and R&D funding assets. The Commission found this commitment sufficient to meet the concerns and approved the merger conditionally.
(European Commission Decision - 01.10.2019, M.9076)