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EC opens in-depth investigation into Novelis' proposed acquisition of Aleris

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Christian Fernsby | Tuesday March 26, 2019 4:00AM ET
Novelis
Europe   The Commission is concerned that the proposed acquisition may reduce competition

The European Commission has opened an in-depth investigation to assess the proposed acquisition of Aleris by Novelis under the EU Merger Regulation.


The Commission is concerned that the proposed acquisition may reduce competition in the supply of various semi-finished aluminium products.

Novelis and Aleris are both global manufacturers of aluminium flat rolled products with significant production facilities in the European Economic Area (EEA), in particular in Belgium ,Germany, Italy and the United Kingdom.

With the proposed transaction, Novelis would reinforce its strong market position as a supplier of various flat rolled products.

The Commission's initial market investigation raised several concerns resulting from the combination of both companies' offer of aluminium automotive body sheets.

These are metal sheets used in vehicles' body structure and closures.

At this stage, the Commission is concerned that, following the transaction, customers would face a reduced choice in suppliers, as well ashigher prices for aluminium automotive body sheets.

Customers for this product include various European companies active in the automotive sector, such as car manufacturers and other companies active in the automotive supply chain.

The use of light materials, such as aluminium, allows car manufacturers to produce vehicles that are more fuel-efficient and reduce emissions.

European industrial customers need to be able to source aluminium automotive body sheets at competitive prices, as many of them compete with imported products in the EEA, or export their products outside Europe and compete globally.

The Commission will also further investigate whether the transaction could have an effect on the supply and prices of certain aluminium flat rolled products used in other industries, such as building, construction and floor heating, where the activities of the companies also overlap.

The transaction was notified to the Commission on 18 February 2019.

Novelis and Aleris have decided not to submit commitments during the initial investigation to address the Commission's preliminary concerns.

The Commission now has 90 working days, until 8 August 2019, to take a decision.

The opening of an in-depth investigation does not prejudge the outcome of the investigation.

 

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