The deal marks Hindalco-owned Novelis' entry into the high-end aerospace segment.
The share price of Hindalco Industries jumped 5 percent in the morning trade on April 15 after the company-owned Novelis Inc acquired US-based Aluminium rolled products manufacturer Aleris Corporation.
The deal, which marks Novelis' entry into the high-end aerospace segment, has been closed at an enterprise value of $2.8 billion, the company said in a statement.
" The closure of this deal amidst challenging market conditions reflects our conviction in the Aleris business and its value to our metals portfolio... This is a long-term strategic bet, much like Novelis was in 2007," Aditya Birla Group chairman Kumar Mangalam Birla said.
Novelis will acquire 13 of Aleris' plants across North America, Europe, and Asia and the company is required to divest the plants in Lewisport, Kentucky in the United States and Duffel in Belgium to meet regulatory conditions.
"The Aleris acquisition takes forward our aluminium value-added products strategy and gives us entry into high-end aerospace. It further insulates Hindalco-Novelis from global price volatility and sharpens our focus on the downstream business," said Satish Pai, Managing Director of Hindalco Industries.
Technical analyst Ashwani Gujral of ashwanigujral.com recommends buying the stock with a stop loss of Rs 109, target at Rs 120.
The share was quoting at Rs 118.30, up Rs 4.50, or 3.95 percent. It has touched an intraday high of Rs 123.95 and an intraday low of Rs 116.85.
It was trading with volumes of 646,657 shares, compared to its five-day average of 985,065 shares, a decrease of 34.35 percent.
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