Washington: The US Department of Justice filed a lawsuit against Novelis, a major aluminium company fully owned by India's Aditya Birla Group, seeking to stop it from acquiring rival player Aleris over concern that the proposed USD 2.6 billion acquisition would create a monopoly in the aluminium industry.
A defiant Novelis asserted that it will challenge the lawsuit and is going ahead with its proposed acquisition of Aleris Corporation. Atlanta-headquarters Novelis is a wholly owned subsidiary of Hindalco Industries Ltd of the Aditya Birla Group. Aleris is based in Cleveland, Ohio.
The Department of Justice said in a statement that it has filed a civil antitrust lawsuit seeking to block the proposed transaction in order to preserve competition in the North American market for rolled aluminum sheet for automotive applications, commonly referred to as aluminum auto body sheet. However, Novelis president and CEO Steve Fisher said, "Our merger with Aleris threatens no one, and to the contrary will strengthen our ability to compete against steel, meet growing customer demand for aluminum, achieve our recycling goals, and bolster our sustainability platform worldwide,"
The DOJ lawsuit is based on the contention that the only relevant competition among automotive body sheet providers is that among aluminum manufacturers such as Novelis and Aleris, the Aditya Birla group company said. It ignores competition from steel automotive body sheet, even though steel automotive body sheet is currently used in nearly 90% of the market, it asserted. The Antitrust Division of Department of Justice alleges the transaction would combine two of only four North American producers of aluminum auto body sheet.
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