Hindalco's Acquisition of Novelis
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ICMR HOME | Case Studies Collection
Case Details:
Case Code : BSTR265
Case Length : 17 Pages
Period : 1991 - 2007
Pub Date : 2007
Teaching Note :Not Available
Organization : Hindalco, Novelis
Industry : Aluminum
Countries : US, Canada
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
Background Note
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Hindalco Industries Limited
The Birla Group of Companies was founded by Seth Shiv Narayan Birla in 1857 as a
cotton trading company at Pilani, Rajasthan, India. The group later expanded its
operations into other business segments (Refer to Exhibit V for other business
of Birla Group).
Hindustan Aluminum Corporation Limited (HACL) was established
on December 15, 1958, to manufacture alumina, aluminum, and aluminum fabricated
items. The company was formed as collaboration between Kaiser Aluminum &
Chemicals Corporation (KACC), US, and the Birla Group.
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Under the agreement with KACC, KACC had to train the people
of HACL and provide technical advice and information for 20 years along with the
assistance to operate the aluminum fabrication plant...
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Novelis
Novelis was split from its parent company, Alcan Inc. (Alcan), the
Canada-based aluminum giant and set up as its subsidiary in January
2005. The origin of the company can be traced back to 1902 when the
Northern Aluminum Company, a Canadian subsidiary of the Pittsburgh
Reduction Company was set up.
The Pittsburgh Reduction Company was
renamed as the Aluminum Company of America (ALCOA) in the year 1907. In
1925, The Northern Aluminum Company was renamed the Aluminum Company of
Canada (ACOC) Limited... |
The Deal
Hindalco acquired Novelis through its wholly owned subsidiary AV Metals on February 10, 2007. AV Metals purchased 100 percent of the issued and outstanding common shares of Novelis at US$ 44.93 per share, amounting to US$ 3.6 billion. Hindalco paid a premium of 16.6 percent on the closing price of Novelis' stock. Apart from equity purchase, Hindalco also acquired Novelis' debts to the tune of US$ 2.4 billion...
Excerpts Contd...>>
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