Jan. 7, 2015
Aleris Plans to Sell Extrusions Business
Aleris, the Cleveland-based aluminum maker, plans to sell its aluminum extrusions business to Sankyo Tateyama, Inc., a Japanese building products and extrusions manufacturer. The sale includes four production facilities in Europe and one in China. The facilities specialize in the production of medium and hard alloy extrusions for the rail, automotive and aerospace industries.
“The sale of our extrusions business represents the last step in our strategy to position Aleris to become a pure global rolled products business focused on serving a diverse set of industries including automotive, aerospace, and building and construction,” says Steve Demetriou, Aleris chairman and CEO. “We will use the proceeds from the sale of extrusions to strengthen our balance sheet and enhance our liquidity as we continue to reinvest in our rolled products capabilities.”
The extrusions spinoff follows the company’s announcement in October that it plans to sell its recycling and specification alloys businesses to Signature Group Holdings. Upon completion of both transactions, Aleris will become a singularly focused global rolled products company with manufacturing sites in North America, Europe and China. In 2013, the extrusions business accounted for $355 million of the company’s $4 billion in total revenue.
“The extrusions business is a solid, well-run business that serves a number of premier customers, but it represents a relatively small part of the overall Aleris portfolio,” Demetriou adds. “Sankyo Tateyama views these sites as very complementary to their existing extrusions business, bringing advanced production technology and strategic geographic locations that will enable Sankyo Tateyama to grow.”
Aleris has made a number of investments in its rolled products business over the past several years, including the construction of an aerospace plate mill in Zhenjiang, China, a new automotive facility in Duffel, Belgium, and this year’s acquisition of Nichols Aluminum in the U.S. In October, the company also broke ground on a $350 million investment in its Lewisport, Ky., facility to serve the automotive industry.