The Hindalco Novelis merger marks one of the biggest mergers in the aluminum industry. The deal was a significant step in Hindalco’s aim of. Kumar Mangalam Birla on Aleris buy, Voda-Idea merger and cement Why would you say Aleris is a perfect fit for Novelis and Hindalco?. Mumbai: Hindalco Industries Ltd has offered to buy Novelis Inc. in a $6 billion all- cash deal that will marry the world’s 13th largest maker of aluminium with a.

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Hindalco has strong presence in upstream and metal businesses, while Novelis is himdalco world leader in downstream businesses.

These three institutions have underwritten the debt amount with UBS taking care of the majority portion. Valuation in Merger and Acquisition. Hindalco plays no role at all in the financing for this transaction. It gives Novelis a stronger franchise in the auto market and therefore solidifies its position in the auto market.

Hindalco to acquire Novelis for $6 bn

As you know, auto is using more and more of aluminium from the point of view of light weighting to be able to meet environmental norms. Will be displayed Will not be displayed Will be displayed.

Inthe company acquired a Kumar Mangalam Merge steers talks to bring home Aleris.

The milestones reached by Hindalco through this deal were — Hindalco became the largest aluminum rolling company in the world.

This will not only help Hindalco penetrate highly valued US and other western markets Novelis has operations in 11 countries but also help the shareholders to regain their investment Novelis is presently a loss making company.

A key tenet of Hindalco’s strategy is continuous growth.

I understand they are into value added products and that will give it a boost, but going forward what is the kind of synergy benefits that you see between the two companies? We believe that Novelis can get the debt at least a couple of bps if not even lower as compared to Aleris.

Hindalco Novelis Merger | World Finance

Never miss a great news story! How does Novelis finance this transaction? Get instant notifications from Economic Times Allow Not now. The risk associated in the merger of these two entities is perceived to be a little higher on account of the sheer size of the two companies.

A strategy lies behind the proposed merger between India’s largest aluminum producer, Hindalco Industries, and Canada’s Novelis nyse: One of the biggest mergers hihdalco the aluminum industry took place between Hindalco and Novelis. This was one of the reasons for the poor performance of Hindalco stocks after the merger took place.

Flexible and semi-rigid packaging d. To see your saved stories, click on link hightlighted in bold. With the takeover, Hindalco now has these glories to itself. According to this contract, Novelis will provide cans at a price which is tapped, novleis which Novelis will incur the cost.

Aleris acquisition makes Hindalco largest aluminium company in world: Kumar Mangalam Birla

Here economies of scale are to make a big impact on the extend of success of the merger. Hostile and Friendly Takeover.

Synergy The combination of Hindalco and Novelis will establish a global integrated aluminum producer with low-cost alumina and aluminum production facilities combined with high-end aluminum rolled product capabilities. There has been a school of thought which says that Hindalco which paid hinndalco price of about 6 billion USD is a little too much for the merger.

The company caters to markets like: Once that is done, it can supply the raw material to Novelis at a very economic cost as Novelis does not produce the inputs to its process aluminum in part or whole. This amount was inclusive of all debts. It is a widely held company and its shareholders are largely hedge funds and institutional investors.

Novelis is globally positioned, operating in 11 countries with approximately 12, employees. Impact of Merger and Acquisition. History of Merger and Acquisition. Those fears are completely unfounded.

Also one of the reasons which lead to an nofelis fall in the prices of for Hindalco is the fact that Novelis has a high amount of debt which is in the range of 2.

Hjndalco complementary expertise of both these companies will create and provide a strong platform for sustainable growth and ongoing success.

Reasons Behind Merger and Acquisition. Benefits of Merger and Acquisition. Hindalco on the other side has announced capacity expansion plans in a major way in the coming three to five years.

Com All Rights Reserved. Acquisition of Hutchinson Essar by Vodafone meryer Case Merrill analyst Vandana Luthra pointed out that during periods of rising aluminum prices, margins are sharply squeezed, as selling prices for finished product do not increase commensurately. In the words of Mr.

Hindalco to acquire Novelis for $6 bn – Livemint

The way to look at valuation is to see other comparable transactions in the same sector. Automotive and Transportation g. For Hindalco, technology and process leadership, cost-effective manpower and onvelis market will help rationalize the cost structures and balance the pressure on the bottom lines. Novelis is a global leader in the production of aluminum rolled products market. The Hindalco Novelis merge r marks one of the biggest mergers in mefger aluminum industry.

The Company has taken two major initiatives in this direction in the recent past. Speciality Consumer and Industrial f. The transaction was accomplished by way of a statutory plan of arrangement under Canadian law. It is all of the balance sheet of Novelis which is the point to mefger.

Foul language Slanderous Inciting hatred against a certain community Others. Aleris is in the same space as Novelis which is aluminium controlled products.