Hindalco Industries rose 1.29% to Rs 183.90 after the company's US subsidiary Novelis reaffirmed its commitment to acquire Aleris.
Novelis reaffirmed its full commitment to closing its proposed acquisition of Aleris Corporation, notwithstanding the U.S. Department of Justice (DOJ) lawsuit to block the transaction. Novelis intends to vigorously defend against the DOJ's challenge, which it believes is without merit.
The company is confident that the transaction will ultimately receive all necessary regulatory approvals in the U.S. and in other relevant jurisdictions.
The DOJ lawsuit is based on the contention that the only relevant competition among automotive body sheet providers is that among aluminum manufacturers such as Novelis and Aleris. It ignores competition from steel automotive body sheet, even though steel automotive body sheet is currently used for nearly 90% of the market.
The DOJ also disregards the extraordinary bargaining power of the automotive manufacturers and their ability to generate bid processes that will ensure competitive pricing for automotive body sheet.
Also Read
Hindalco Industries owned Novelis was reportedly set to secure European Union (EU) antitrust approval for its bid for Aleris last week. Novelis had agreed to sell Aleris' Belgian plant to address European Commission worries that the deal may reduce competition and lead to higher prices, hitting carmakers in particular. The Commission is scheduled to decide on the case by 7 October 2019.
Novelis had announced in July 2018 that it has signed a definitive agreement to acquire Aleris Corporation, a global supplier of rolled aluminium products, for approximately $2.6 billion including the assumption of debt.
Meanwhile, the S&P BSE Sensex was down 142 points or 0.39% to 36,582.29.
On the BSE, 2.08 lakh shares were traded in the Hindalco Industries counter so far compared with average daily volumes of 46 lakh shares in the past one quarter. The stock hit a high of Rs 188.45 and a low of Rs 181.95 so far during the day.
The stock hit a 52-week high of Rs 259.7 on 04 Oct 2018. The stock hit a 52-week low of Rs 171.25 on 26 Aug 2019.
On a consolidated basis, Hindalco's net profit fell 26.91% to Rs 1,077.83 crore on a 3.56% decline in the net sales to Rs 29,972.13 crore in Q1 June 2019 over Q1 June 2018.
Hindalco Industries, an Indian aluminium and copper manufacturing company, is a subsidiary of the Aditya Birla Group. It is the flagship company of the company in the metals business.
Powered by Capital Market - Live News
Disclaimer: No Business Standard Journalist was involved in creation of this content
