The Hindalco Novelis merger marks one of the biggest mergers in the aluminum industry. The deal was a significant step in Hindalco’s aim of. Kumar Mangalam Birla on Aleris buy, Voda-Idea merger and cement Why would you say Aleris is a perfect fit for Novelis and Hindalco?. Mumbai: Hindalco Industries Ltd has offered to buy Novelis Inc. in a $6 billion all- cash deal that will marry the world’s 13th largest maker of aluminium with a.

Author: JoJojind Akinorg
Country: Bolivia
Language: English (Spanish)
Genre: Art
Published (Last): 9 May 2004
Pages: 111
PDF File Size: 9.62 Mb
ePub File Size: 16.85 Mb
ISBN: 534-7-22373-408-7
Downloads: 78237
Price: Free* [*Free Regsitration Required]
Uploader: Kilmaran

Fill in your details: Valuation in Merger and Acquisition. For instance, price ceilings on beverage cans in the U. For Hindalco to build such a big market presence as that of Novelis by its own would had taken a very long time, which is the reason why this would be a very advantageous move for Hindalco as far as company strategy is concerned. So there is a possibility that the performance of the two companies may be completely opposite to each other.

One of the biggest mergers in the aluminum industry took place between Hindalco and Novelis.

It has 13 very hi-tech manufacturing sites across Europe, the US and China. NIFTY 50 10, AL – news – people after its former U. To see your saved stories, click on link hightlighted in bold. Watch the latest videos on YouTube. The ratio is at present at 0.

It has operations in four continents comprised of 34 operating facilities in 11 countries. This will mergre our moderators to take action Name Reason for reporting: The most important synergy that the companies can be looking for with this merger is the fact that Novelis is a producer of aluminum products whereas Hindalco is the lowest cost base metal producer in the world as far as aluminum is concerned.


The complementary expertise of both these companies will create and provide a strong platform for sustainable growth and ongoing success. Cans and closures c.

Hindalco’s Acquisition of Novelis|Business Strategy|Case Study|Case Studies

There will be no job cuts at Novelis. The deal will lead to the debt-equity ratio of Hindalco going up.

From the performance reports, it was evident that Novelis had incurred huge losses which will tend to decrease as most of its contracts with tapped prices will get over by the end of Merrill analyst Vandana Luthra pointed out that during periods of rising aluminum prices, margins are sharply squeezed, as selling prices for finished product do not increase commensurately.

The biggest benefit to Hindalco, however, was the access to the most sophisticated and advanced technology in the industry that Novelis had at its disposal.

Hindalco Novelis Merger

In the words of Mr. This transaction is completely financed on the balance sheet of Novelis and that is hugely value creating. GM – news – people. The risk associated hindalci the merger of these two entities is perceived to be a little higher on account of the sheer size of the two companies.

Hindalco to acquire Novelis for $6 bn – Livemint

Novelis will operate as a subsidiary of the Company. The way to look at meger is to see other comparable transactions in the same sector. According to this contract, Novelis will provide cans at a price which is tapped, beyond which Novelis will incur the cost.

Automotive and Transportation g. Newer Post Older Post Home. This was one of the reasons for the poor performance of Hindalco stocks after the merger took place. KO – news – peopleAnheuser-Busch nyse: This will help Novelis in bringing down its cost of production, particularly at a time when metal prices, particularly aluminum are running strong, which in turn will help Novelis hundalco improve upon its margins and it will get reflected in the balance sheets of both the companies.


I would say that 7. Highlights Aleris mrger Novelis access to new sectors like building and construction, aerospace other than auto Hindalco plays no jindalco at all in the financing for this transaction.

About Hindalco Based in Mumbai, India, Hindalco is one of the most cost-efficient aluminum producers globally.

Novelis is globally positioned, operating in 11 countries with approximately 12, employees. Aleris is in the same space as Novelis which is aluminium controlled products. Difference between Merger and Acquisition. Here economies of scale are to make a big impact on the extend of success of the merger. BUD – news – people and General Motors nyse: With aluminum prices going over through the roof, Novelis has to bear it all.

Hindalco to acquire Novelis for $6 bn

A strategy lies behind the proposed merger between India’s largest aluminum producer, Hindalco Industries, and Canada’s Novelis nyse: A key tenet of Hindalco’s strategy is continuous growth. Technicals Technical Chart Visualize Screener.

Speciality Consumer and Industrial f. Get instant notifications from Economic Times Allow Not now. For Hindalco, technology and process leadership, cost-effective manpower and ready market will help rationalize the cost structures and balance the pressure on the bottom lines.

NVL – news – peoplethe biggest producer of flat-rolled aluminum products, whose customers include Coca-Cola nyse: The second of the initiatives was a brownfield expansion of facilities at a cost of Rs.