Aleris announced today that it has
signed a definitive agreement 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, serving the rail, automotive and aerospace industries.
Sankyo Tateyama has agreed to pay a purchase price of €35.5 million for the
business and assume approximately €46 million of pension liabilities. The
transaction is expected to close in the first quarter of 2015.
"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," Steve Demetriou, Aleris chairman and CEO said.
"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 announcement of the extrusions transaction follows the company's
announcement in October that it plans to sell its recycling and specification
alloys businesses to Signature Group Holdings. Upon the 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 added. "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 a world-class 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,
Kentucky facility to serve the automotive industry.
Moelis & Company LLC acted as exclusive financial advisor to Aleris on this
transaction. Fried Frank acted as legal advisor.
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