Aug. 31, 2016

Chinese Company to Acquire Aleris

Aleris, the Cleveland-based aluminum rolled products producer, will be acquired by China’s Zhongwang USA, LLC, in a deal valued at $2.33 billion. On completion of the transaction in first-quarter 2017, Aleris will continue to operate as an independent entity, with the current management team remaining in place. No changes are planned to current operations, contracts or commitments, including the ongoing expansion of Aleris’ Lewisport, Ky., facility.

"We are excited about this transition to strategic ownership as it will allow us to accelerate our strategy to expand our capabilities to support the production of high-value advanced materials for the global automotive and aerospace markets, while maintaining our position as a leading supplier to critical regional markets like building and construction," says Sean Stack, president and CEO of Aleris. "We expect the transition to be seamless for our employees and customers, and that the new strategic shareholder will provide us with greater financial flexibility to continue to anticipate and meet the needs of our customers well into the future."

The acquisition of Aleris reflects Zhongwang founder Liu Zhongtian’s commitment to disciplined operating investments over the long-term, the company claims. In addition to his role at Zhongwang USA, Liu is also the chairman and founder of China Zhongwang, the second largest aluminum extrusions developer and manufacturer in the world.

"This acquisition is an international expansion to establish a complementary business foothold, as I strongly believe in the potential and prospects of Aleris and the aluminum industry as a whole," Liu says. "As the company enters the final phase of its Lewisport automotive project, I believe Aleris is well-positioned to capitalize on the positive demand trends we see globally. I look forward to supporting the Aleris management team in implementing their growth strategies and pursuing continued success with expanded resources and financial and operational flexibility."

The Aluminum Extruders Council, which has been active in an ongoing trade dispute involving Chinese products, expressed concern about the deal. “Zhongwang is a state-supported enterprise and has received large benefits and financing from the government of China. Zhongwang also has a long history of circumventing and evading duties in trade cases by shipping over a billion pounds of ‘fake’ extrusions to Mexico and Vietnam. Zhongwang has refused to respond to every questionnaire the Department of Commerce has issued; it remains to be seen whether Zhongwang and its affiliates will respond to the Committee on Foreign Investment questionnaires,” states a release from the Wauconda, Ill.-based trade group.

Since 2010, Aleris has been owned and controlled by a group of investment funds led by Oaktree Capital Management, L.P., with affiliates of Apollo Management, L.P., and Sankaty Advisors, LLC, owning minority interests.


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Sunday, October 22, 2017