Hindalco And Novelis

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Indian aluminium giant Hindalco acquired Atlanta based company Novelis, a world leader in aluminium rolling and flat-rolled aluminium products, on May 15, 2007. This acquisition was done to gain immediate scale and a global footprint. Acquiring Novelis would give Hindalco access to sheet mills, that supplied to can manufacturers and auto companies. By investing in downstream Hindalco would go up the value chain and become a world leader in downstream aluminium rolled products. It was already the biggest producer of primary aluminium in Asia and leader in copper production in India. On May 15, 2007, Novelis was acquired by Hindalco through Acquisition Subsidiary (i.e. AV Metals) pursuant to the arrangement entered into on February 10, 2007 and approved by the Ontario Superior Court of Justice on May 14, 2007. As a result of the Arrangement, Acquisition Subsidiary (i.e., AV Metals) acquired all of the Novelis’ outstanding 75,415,536 common shares at a price of US $44.93 per share, and all outstanding stock options and other equity incentives were terminated in exchange for cash payments. The aggregate purchase price for the Novelis‟ common shares was US $3.4 billion [(Cost of Common Shares = US $3,388 million (75,415,536 × US $44.93) + Direct transaction costs incurred by Hindalco = US $17 million]. The quoted price of US $44.93 per share was 16.6 percent premium over the stock‟s closing price on February 9, 2007. Immediately following the arrangement, the common shares of Novelis were transferred from Hindalco’s Acquisition Subsidiary (i.e., AV Metals) to its wholly-owned subsidiary AV Aluminium Inc. (i.e., AV Aluminium). Hindalco also assumed US $2.8 billion of Novelis‟ debt for a total transaction value of US $6.2 billion (Aggregate Purchase Price for Novelis’ common shares of US $3.4 billion + Novelis‟ Total Debt of US $2.8

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