By Nicole Golliher
Aleris Corp, a Cleveland-based aluminum rolled products producer, announced its purchase by Zhongwang USA LLC on Monday. At $2.33 billion dollars, this is the United States’ largest overseas purchase of a metals processor.
Zhongwang USA LLC is owned by Liu Zhongtian, who also founded China Zhongwang Holdings Ltd., the second largest producer of extruded aluminum in the world. Liu’s US holding is acquiring Aleris; China Zhongwang declined purchasing it directly, but states that it will consider doing so at an “appropriate” after this deal is complete.
Liu plans to operate both companies separately, citing their complementary geographic footprint and capabilities as motivations for the purchase. Aleris Corp announced that it will continue serving its current customers and operations, including an expansion into Kentucky, and will keep the same management.
Aleris CEO Sean Stack states that he expects “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.”
This deal increases China’s influence in global metals markets as the US aluminum industry is pushing the government to crack down on dumping and unfair practices by China’s aluminum producers. The US Commerce Department is looking into China Zhongwang for possible circumvention of anti-dumping duties.
This deal is also representative of China’s shift to higher value-added goods as it gains knowledge not currently held in the country.
Aleris Corp serves advanced customers in a broad range of industries, including aerospace and automobile companies such as Airbus Group, Siemens AG, Bombardier Inc., and Boeing Co. Purchasing Aleris gives Zhongwang access to the company’s technology, which supports Zhongwang’s ambitions to sell to China’s emerging aerospace and automobile industries.
Aleris Corp’s purchase is expected to close in the first quarter of 2017 following customary regulatory approvals and closing conditions. Stack said the Commerce Department’s investigation into China Zhongwang is not expected to impact the sale.