Zhongwang USA LLC announced on Tuesday that US aluminum company Aleris Corporation would “operate as an independent entity” after acquisition including with regard to its location, management team and development strategy.
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A Chinese billionaire has agreed to acquire United States aluminum maker Aleris Corporation for US$2.33 billion including debt, one of his companies said, the latest overseas takeover by a Chinese firm. It claims Zhongwang shipped out semi-finished aluminum products from China to companies that Liu and people close to him control overseas, where the material was allegedly reprocessed back into aluminum billet and sold again.
“This acquisition is an global 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 said in a statement.
Post closing, Aleris will retain its name and continue to be headquartered in Cleveland, Ohio. “There is no overlap or competition between Zhongwang and Aleris”.
Aleris is being bought by Zhongwang USA LLC, an investment company owned by Zhongwang International Group Ltd., parent company of China Zhongwang. According to Bloomberg Supply Chain data, Aleris’ customers around the world include Airbus Group, Siemens AG, Bombardier Inc., Boeing Co. and ABB Ltd. It has been accused of evading U.S. import duties on extruded products, prompting an investigation by the U.S. Department of Commerce (DOC).
Allegations were brought on from the U.S. Aluminum Extruders Council (AEC) following a detailed report released by short-seller Dupre Analytics accusing Liu of inflating Zhongwang’s sales over the past four years.
The Aleris deal is meant to help the Chinese tycoon tap into the North American and European markets as the USA firm has a partnership with Figeac Aero, a supplier to companies including Airbus, Boeing and Bombardier. It went public on the Hong Kong stock exchange in 2009.
Stack also said the deal is not a consolidation acquisition by the Zhongwang unit. China Zhongwang closed 0.8 percent lower at HK$3.76.
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“At some point in the future, the two companies may evaluate opportunities for mutually beneficial cooperation”, Zhongwang USA said in its e-mail.
