Hindalco Surges 9% On Closing $2.8 Bn Deal To Acquire Aleris
Business
oi-Olga Robert
By Staff
On Wednesday, shares of Hindalco Industries Ltd rose as much as 9 percent to Rs 124 and was the top gainer on Nifty 50 in early trade.
The surge comes a day after the Aditya Birla Group company completed the buyout of Aleris Corp by its wholly-owned subsidiary Novelis Inc at an enterprise value of $2.8 billion (Rs 21,295 crores). This could mean the potential entry of Novelis into high-end aerospace segment.
"The Aleris acquisition takes forward our aluminium value-added products strategy and gives us entry into high-end aerospace. It further insulates Hindalco-Novelis from global price volatility and sharpens our focus on the downstream business," said Satish Pai, Managing Director of Hindalco Industries.
The closing purchase price of $2.8 billion consists of $775 million for the equity value and approximately $2.0 billion for the assumption of Aleris' current outstanding debt and a $50 million earn-out payment.
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