Hindalco share price jumped nearly 9% today after its arm Novelis Inc acquired US-based Aluminium rolled products manufacturer Aleris Corporation. Share price of Hindalco rose 8.92% to Rs 123.95 compared to the previous close of Rs 113.80 on BSE.Hindalco stock has gained 17.72% in the last 3 days. The stock opened with a gain of 4.79% at Rs 119.25. The large cap stock has lost 43.87% during the last one year and fallen 45% since the beginning of this year.
The deal, which marks Novelis' entry into the high-end aerospace segment, has been closed at an enterprise value of $2.8 billion, the company said in a statement.
"The closure of this deal amidst challenging market conditions reflects our conviction in the Aleris business and its value to our metals portfolio. This is a long-term strategic bet, much like Novelis was in 2007," Aditya Birla Group chairman Kumar Mangalam Birla said.
Novelis will acquire 13 of Aleris' plants across North America, Europe, and Asia and the company is required to divest the plants in Lewisport, Kentucky in the United States and Duffel in Belgium to meet regulatory conditions.
"The Aleris acquisition takes forward our aluminium value-added products strategy and gives us entry into high-end aerospace. It further insulates Hindalco-Novelis from global price volatility and sharpens our focus on the downstream business," said Satish Pai, Managing Director of Hindalco Industries.
By Aseem Thapliyal
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