[ferro-alloys.com]Novelis must divest assets from Aleris' North American automotive business in order to gain US approval for its proposed acquisition of Aleris as part of an agreement with the US Department of Justice, Novelis said Monday.

The agreement follows an arbitrator's ruling Monday that aluminum and steel are not in the same relevant product market for automotive body sheet under antitrust laws, Novelis said in a statement.

"This decision ignores the reality of the automotive body sheet market and the competition we have faced against steel for years," Novelis CEO Steve Fisher said, referring to the company's stance that its sheet business competes directly with the larger automotive steel industry, rather than only other aluminum suppliers.

The DOJ filed a lawsuit in September to block Novelis' acquisition of Aleris, stating that the "acquisition would eliminate a new and disruptive rival supplying aluminum sheet for the next generation of automobiles."

"The loss of a competing supplier of aluminum auto body sheet ultimately would harm American car buyers," US DOJ Antitrust Division Assistant Attorney General Makan Delrahim said at the time.

The arbitration hearing, which concluded last week, sought to resolve the dispute resulting from the lawsuit. The hearing was held over ten days and included testimonies from eleven fact witnesses and three expert witnesses, the DOJ said in a statement Friday.

"If the US prevails, the US will then file a proposed final judgment that requires Novelis to divest certain agreed-upon assets to preserve competition in the relevant market," the DOJ said.

Novelis said it will now work to divest Aleris' Lewisport, Kentucky, aluminum automotive sheet plant, as well as other possible assets.

"We are moving forward with the acquisition of Aleris to realize the many benefits this transaction will bring to our employees, customers and the aluminum industry as a whole," Fisher said.

However, Novelis said the DOJ will allow the acquisition to close prior to the divestiture of Aleris' US assets once the company obtains European Commission approval of the acquisition.

Similar to Novelis' agreement with the DOJ, the EC has required Novelis to divest Aleris' rolling mill in Duffel, Belgium, in order to proceed with the acquisition. The EU commission is still reviewing the sale of the mill to UK-based conglomerate Liberty House Group.

(S&P Global Platts)

• [Editor:王可]