Why Hindalco's Aleris deal details should calm nerves in the market

Deal valuation, likely operating profit of $360 mn better than expectations

The Street’s nervousness over Hindalco’s expected acquisition of US-based Aleris was reflecting in its stock price volatility during the last one week. Though Hindalco’s intension to acquire Aleris through its US-subsidiary Novelis were known ever since it had bid for the business, and the enterprise value of close to $2.5 billion too was expected — the Street was worried over the deal valuation. 

Since Aleris had earned adjusted Ebitda (operating profit) of $200 million in calendar year (CY) 2017 and had a net debt of $1.68 billion, it was seen as an expensive deal. 

But, with Hindalco’s announcement now pegging