MUMBAI: Hindalco's $6 billion bid for North American aluminium company Novelis received approval from the latter's shareholders on Friday. The deal now awaits a final court approval under Canadian law before Novelis becomes a subsidiary of Hindalco. The approval is expected by May 15.
On February 11, Hindalco had emerged the successful bidder for Novelis, making it the fifth-largest aluminium player in the world. Novelis currently has a turnover of $8.4 billion. Along with Hindalco's turnover of close to $2.5 billion, the combined entity will have a turnover of nearly $11 billion.
The acquisition doubles turnover of AV Birla group, which is $12 billion at present. Over 23% of the group's revenues flow from its operations in other parts of the world. It employs 82,000 people belonging to 20 different nationalities.
At a special meeting held on May 10 in Atlanta, US, the headquarters of Novelis, its shareholders voted to approve Hindalco's offer. More than 99% of the votes were cast in favour of the transaction.
According to the terms, Hindalco, via its subsidiary AV Metals, will acquire Novelis for $44.93 per share in cash. This puts the enterprise value of Novelis at $6 billion, including debt. Upon completion of the arrangement, Novelis will become a subsidiary of Hindalco.
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