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Report: Novelis close to securing EU approval for Aleris takeover

Hindalco Industries Ltd. unit Novelis Inc. is close to gaining approval from EU competition authorities for its US$2.6 billion takeover of Aleris Corp., Reuters reported, citing sources familiar with the matter.

Novelis has agreed to sell Aleris' Duffel plant in Belgium, in order to address European Commission concerns that the acquisition may decrease competition and lead to higher prices which will particularly impact carmakers, according to the sources.

The company previously argued that the takeover will not increase prices as there is competition from other aluminum and steel producers, in addition to customers' inclination to shift to rivals.

As mentioned by sources earlier in August, Novelis was willing to offer an increase in capacity and add 80 new jobs at Duffel to ease the regulator, but the company was pushed to offer a much more extensive concession package.

Novelis added that it is working with the competition enforcer with the aim of closing the transaction by the end of this year.

The European Commission is now scheduled to take a decision by Oct. 7, which will be followed by approvals from U.S. and Chinese regulators.