BRUSSELS (Reuters) - U.S. aluminum maker Novelis [NVLXC.UL] must offer concessions to European Union competition authorities by Aug. 9 to gain approval for its $2.6 billion takeover of aluminum processor Aleris [TXPACA.UL], sources close to the matter said.
Novelis, part of India’s Hindalco Industries, bid for Aleris in July last year as part of its diversification into the aerospace, automotive, beverage can and construction industries among others.
The European Commission conducted a four-month investigation of the acquisition and last month set out its concerns over how the deal could hurt competition, particularly for carmakers that use the companies’ products.
The EU competition enforcer, which is scheduled to decide on the case by Sept. 16, and Novelis declined to comment.
Novelis and Aleris defended the proposed deal before antitrust officials at a closed-door hearing last week, hoping to address EU competition concerns and secure unconditional approval.
Trade unions from Belgium and Germany also attended the hearing to voice support for the deal, people with direct knowledge of the matter said.
Ahead of the hearing, Novelis felt it was premature to talk about concessions but it has never ruled out the possibility, people close to the situation told Reuters last month.
The company is ready to make a written commitment to increase capacity and add 80 new jobs at the Aleris plant in Duffel, Belgium, to allay regulatory concerns that capacity may be curtailed to increase prices, a source close to the matter said.
Novelis has argued that the deal will not lead to higher prices because of competition from other aluminum and steel producers as well as customers’ willingness to switch to rivals.
Reporting by Foo Yun Chee; Editing by David Goodman