BEACHWOOD, Ohio, March 16 /PRNewswire-FirstCall/ -- Aleris International,
Inc. (NYSE: ARS) today announced that it has entered into a non-binding letter
of intent to acquire the $1.8 billion revenue downstream aluminum business of
Corus Group plc.
The proposed transaction would include Corus' aluminum rolling and
extrusion businesses but will not include Corus' primary aluminum smelters.
Net cash consideration for the acquisition will be approximately 700 million
euro (US $840 million), excluding the assumption of approximately 28 million
euro of debt as well as certain other liabilities. The parties intend to enter
into a binding agreement following Corus' consultations with the appropriate
European employee works councils and trade unions as required by applicable
labor laws. The acquisition would be subject to regulatory approvals, with the
closing envisaged in the third quarter of 2006.
Steven J. Demetriou, Chairman and Chief Executive Officer of Aleris said,
"The Corus businesses provide an outstanding opportunity to expand our global
reach and enter new aluminum applications with superior technology and high
value-added products including aircraft plate and sheet, automotive sheet and
hard-alloy extrusions, among many others. In addition, we will have many new
global customers and world-class research and development and manufacturing
capabilities that we will utilize throughout our global operations. Aleris
will be gaining a management team with deep industry experience and a
technically oriented highly skilled work force. Our greater scale, broader
product offering and geographic exposure should accelerate our growth and
provide greater earnings diversity."
Aleris expects to fund the acquisition with a combination of debt and
equity to provide the Company the optimum financial flexibility in the future.
Aleris has received a joint commitment from Deutsche Bank AG and Citigroup
Corporate and Investment Banking to provide all funding necessary to close the
transaction.
The Company expects the proposed transaction to be accretive to earnings
in the first twelve months following the acquisition. The Company's
preliminary estimate of potential synergies resulting from the transaction is
$25 million, which will be realized over the next two years. Principal areas
of focus include metals and non-metals purchasing and manufacturing where the
transfer of best practices and the implementation of Six Sigma and predictive
maintenance capabilities should provide significant opportunities.
Under the terms of the letter of intent, Aleris would acquire the aluminum
rolling and extrusion businesses of Corus' aluminum division while Corus will
retain its two aluminum smelters in Delfzijl, Netherlands and Voerde, Germany.
Aleris will execute a metal supply agreement with Corus for a portion of the
expected aluminum requirements of the rolling and extrusion businesses.
Corus' aluminum rolling business has facilities in Koblenz, Germany; Duffel,
Belgium; and Cap-de-la-Madeleine and Toronto, Canada. The Koblenz rolling mill
is one of the most specialized mills in the world with longstanding
relationships with leading aerospace, commercial plate and brazing sheet
customers worldwide. The extrusion business has facilities in Vogt, Bonn and
Bitterfeld, Germany; Duffel, Belgium; and Tianjin, Peoples Republic of China.
These Corus downstream aluminum businesses employ approximately 4600
employees.
For 2005, Aleris reported revenues of $2,429 million and net income of
$74.3 million. We estimate that, in 2005, the Corus downstream aluminum
businesses generated revenues of approximately 1,478 million euro (US $1,840
million).
Following completion of the proposed transaction, the combined company
would have a total of approximately 8,800 employees and would operate 52
manufacturing locations in North America, South America, Europe and Asia.
Citigroup Corporate and Investment Banking acted as advisor to Aleris on
the transaction.
About Aleris
Aleris International, Inc. is a major North American manufacturer of
rolled aluminum products and is a global leader in aluminum recycling and the
production of specification alloys. We are also a leading manufacturer of
value-added zinc products that include zinc oxide, zinc dust and zinc metal.
Headquartered in Beachwood, Ohio, a suburb of Cleveland, the Company operates
42 production facilities in the United States, Brazil, Germany, Mexico and
Wales, and employs approximately 4,200 employees. For more information about
Aleris, please visit our Web site at http://www.aleris.com.
SAFE HARBOR REGARDING FORWARD-LOOKING STATEMENTS
Forward-looking statements made in this news release are made pursuant to
the safe harbor provision of the Private Securities Litigation Reform Act of
1995. These include statements that contain words such as "believe,"
"expect," "anticipate," "intend," "estimate," "should" and similar expressions
intended to connote future events and circumstances, and include statements
regarding future actual and adjusted earnings and earnings per share; future
improvements in margins, processing volumes and pricing; overall 2006
operating performance; anticipated higher adjusted effective tax rates;
expected cost savings; success in integrating Aleris's recent acquisitions;
its future growth; an anticipated favorable economic environment in 2006;
future benefits from acquisitions and new products; expected benefits from
industry consolidation and post-hurricane reconstruction; and anticipated
synergies resulting from the merger with Commonwealth and other acquisitions.
Investors are cautioned that all forward-looking statements involve risks and
uncertainties, and that actual results could differ materially from those
described in the forward-looking statements. These risks and uncertainties
would include, without limitation, Aleris's levels of indebtedness and debt
service obligations; its ability to effectively integrate the business and
operations of its acquisition; further slowdowns in automotive production in
the U.S. and Europe, the financial condition of Aleris' customers and future
bankruptcies and defaults by major customers; the availability at favorable
cost of aluminum scrap and other metal supplies that the Company processes;
the ability of the Company to enter into effective metals, natural gas and
other commodity derivatives; continued increases in natural gas and other fuel
costs of the Company; a weakening in industrial demand resulting from a
decline in U.S. or world economic conditions caused by terrorist activities or
other unanticipated events; future utilized capacity of the Company's various
facilities; a continuation of building and construction customers and
distribution customers reducing their inventory levels and reducing the volume
of the Company's shipments; restrictions on and future levels and timing of
capital expenditures; retention of the Company's major customers; the timing
and amounts of collections; currency exchange fluctuations; future write-downs
or impairment charges which may be required because of the occurrence of some
of the uncertainties listed above; and other risks listed in the Company's
filings with the Securities and Exchange Commission, including but not limited
to the Company's quarterly reports on Form 10-Q for the periods ended March
31, 2005, June 30, 2005 and September 30, 2005 and its annual report on Form
10-K for the fiscal year ended December 31, 2005, particularly the sections
entitled "Risk Factors" contained therein.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050504/CLW056LOGO )
SOURCE Aleris International, Inc.
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Related links:
http://www.aleris.com
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NewsCom:
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CONTACT:
Kim Pichanick Aleris International, Inc.,
+1-281-468-0878
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