linkedin
ET Prime
Deals

Hindalco-Novelis-Aleris: Al’s well that ends well

Hindalco turned around Novelis, proving naysayers wrong. It can repeat that with Aleris.
Kumar Mangalam Birla, chairman, Aditya Birla Group, which owns the aluminium company Hindalco; Dhiraj Singh/Bloomberg/Getty Images Getty Images
Kumar Mangalam Birla, chairman, Aditya Birla Group, which owns the aluminium company Hindalco; Dhiraj Singh/Bloomberg/Getty Images
In 2007, when Hindalco acquired Novelis for USD6 billion in a bid to expand its global footprint, the markets reacted negatively. Their concern? The price was too high. Also, Novelis had high debt. It was a different deal structure compared with the leveraged buyout the markets had seen in the Tata-Corus deal. But by 2010, the story had changed. Novelis
company well and manage the debt, the deal still makes sense. The key point is that Hindalco is a strategic partner that would want to maintain its leading, global position unlike a financial investor who would just weigh the numbers. Hindalco turned around Novelis. And it can do it again with Aleris. ( Graphics by Ankita Mehrotra)
In 2007, when Hindalco acquired Novelis for USD6 billion in a bid to expand its global footprint, the markets reacted negatively. Their concern? The price was too high. Also, Novelis had high debt. It was a different deal structure compared with the leveraged buyout the markets had seen in the Tata-Corus deal. But by 2010, the story had changed. Novelis company well and manage the debt, the deal still makes sense. The key point is that Hindalco is a strategic partner that would want to maintain its leading, global position unlike a financial investor who would just weigh the numbers. Hindalco turned around Novelis. And it can do it again with Aleris. ( Graphics by Ankita Mehrotra)

Gift this story

0 article remaining this month.
300 characters remaining

Done, keep sharing

0 Left this month

We have e-mailed a link of this article to your friends. They would be able to access this article 0 times till the link expires.

Sorry, quota exhausted

0 article shares left

You have exhausted your quota of gift article shares for this month. Your limit will be reset on the 1st of next month.

Current Edition

Want to make a potent lithium-ion battery? Learn ‘ABC’ first
Strategy

Want to make a potent lithium-ion battery? Learn ‘ABC’ first

With no reserves at home, three Indian PSUs — Hindustan Copper, Nalco, and MECL — have formed a joint venture to scout for lithium assets abroad. Since past experiences of mining in foreign lands have been painful, a lot will depend on how they carry out their resource diplomacy in the world’s lithium triangle of Argentina, Bolivia, and Chile.

[[^message]]

Result

[[/message]] [[#message]]

[[message]]

[[/message]]