mumbai hindalco the metals flagship of the aditya birla group has agreed to acquire the usbased aleris for 26 billion solidifying its position as one of the largest aluminium players in the world the company will acquire aleris through its american outfit novelis in a debtfinanced deal the transaction will make hindalco a 21billion entity in terms of revenues with an employee base of 40000aleris will be hindalcos second acquisition in the us after novelis which it had bought for 6 billion in 2007 hindalcos purchase of novelis was the second biggest overseas deal by an indian entity after tata steels 13 billion acquisition of corus the aleris transaction subject to approval from regulators including antitrust agencies is expected to be closed within 15 months the aditya birla group doesnt see any obstacles in getting antitrust clearances but sees a political risk to the aleris buyoutbefore hindalco struck a deal for aleris its private equity owners oaktree capital apollo and sankaty advisors had entered into a pact with chinese aluminium billionaire liu zhongtain for 23 billion in 2016 but the transaction failed to materialise after it got caught in regulatory crosshairs following criticisms that a chinese connection could compromise proprietary technology used by us defence services aleris makes materials that are used in american battle tanks and armoured vehicleshowever the aditya birla group hopes to succeed in getting all clearances for the aleris buyout we dont see any reason why we wont get a clearance in the us given the presence novelis has in the us combined with our parent company in india novelis chief executive steve fisher said aleris gives hindalco a foothold in the aerospace segment through its technological research and manufacturing capabilities in germany and china aerospace accounts for 14 of aleris revenue of 3 billion trumps protectionist trade policies are prompting companies to acquire businesses in the us as asian nations lose some of their competitive advantage aleris will increase hindalcos total downstream aluminium capacity to 47 million tonnes downstream aluminium means engineered products beverage cans alloy car wheels etc novelis will pay 775 million for equity in aleris and will take over its 18 billion of debt on its books besides germany and china aleris has 11 manufacturing facilities in the world with nine of them located in america aditya birla group chairman kumar mangalam birla said the acquisition diversifies hindalcos product mix in the valueadded segment which has higher margins and is less volatile to aluminium pricesbesides aerospace aleris gives hindalco an entry into the construction market while strengthening its presence in the automotive sector aleris will add another 26 billion to hindalcos current debt of 35 billion the transaction is being advised by goldman sachs and moelis