Abstract

The case discusses the acquisition of US-Canadian aluminum company Novelis by India-based Hindalco Industries Limited (Hindalco), a part of Aditya Vikram Birla Group of Companies, in May 2007. The case explains the acquisition deal in detail and highlights the benefits of the deal for both the companies. It also examines the valuation of the acquisition deal and how the deal was financed. The case concludes by describing the challenges that Hindalco would face in integrating the operations of Novelis and analyzing if the deal was overvalued as opined by some industry experts.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Study the synergies of the merger between Hindalco and Novelis
• Study the rationale behind Hindalco acquiring a loss making aluminum company
• Examine the way the acquisition deal was financed
• Analyze whether the deal was overvalued or not
• Analyze the trends in the global aluminum industry.

Keywords

Hindalco Industries Limited, Novelis Inc., Merger and Acquisition, Deal Valuation, Debt-equity Ratio, EV/EBITDA Ratio, Indian Aluminum Industry, Merger Integration, Consolidation, Downstream Business, Upstream Business