Hindalco share price surged nearly 7 per cent on Friday after the company announced acquisition of American aluminium maker Aleris in a $2.58-billion leveraged deal through its overseas subsidiary Novelis.

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After a positive start, the stock extended gains, jumping 6.68 per cent to Rs 220.35 on BSE. On NSE, shares of the company soared 6.89 per cent to Rs 220.80.

Birla group flagship Hindalco on Thursday announced acquisition of Aleris that will help it diversify product offerings in the value-added products segment.

The acquisition, which comes a decade after the diversified Aditya Birla Group took over Novelis in a $6-billion transaction, will make Hindalco the second largest aluminium maker globally with a revenue of $21 billion and an annual capacity of 4.7 million tonne, chairman Kumarmangalam Birla said. 

Novelis has signed a definitive agreement to acquire the privately-owned Aleris Corporation specialised in automobile and aerospace products, Birla said.

The Cleveland, Ohio-headquartered Aleris is owned by private equity funds Apollo Management and Oaktree Capital Management. Last year, the Chinese company Zhongwang had called off merger talks with it after it failed to get US government approvals.

Just two words from Birla managed to send the stock heading north. What did he say? He termed the acquisition as "value accretive". Birla added another good news and that was that he expects the transaction to be completed over the next 9-15 months.

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The acquisition will increase Hindalco's play in the automotive segment--Birla expects the contribution of this segment to move up by 2 percentage points to 22 per cent of the group's revenue pie--and also diversify the product mix by adding the crucial aerospace segment.

He said both the aerospace and automotive segments are expected to play a pivotal role going ahead.