By Kimberly Chin
The Justice Department filed an antitrust lawsuit with the U.S. District Court for the Northern District of Ohio on Wednesday that sought to block Novelis Inc.'s proposed acquisition of Aleris Corp.
The department said the move aims to "preserve competition" and would block the merger of "two of only four" North American producers of aluminum auto body sheet. "The loss of a competing supplier of aluminum auto body sheet ultimately would harm American car buyers," said Assistant Attorney General Makan Delrahim of the Justice Department's antitrust division.
"Novelis intends to vigorously defend against the DOJ's challenge, which it believes is without merit," the company said in a release, adding that the agency ignores competition from a large swath of the market: steel automotive-body sheet makers.
Aleris couldn't immediately be reached for comment.
The division said it would allow the defendants to refer the issue to binding arbitration if certain conditions are met. The arbitration would help bring to a close the issue of product market definition.
Last summer, Novelis agreed to acquire Aleris by paying $775 million in equity and assuming $1.8 billion in debt.
The Atlanta-based Novelis is a leading producer of aluminum rolled products for automotive and beverage can sheet. It is a wholly-owned subsidiary of Hindalco Industries Ltd., which is headquartered in Mumbai, India.
The Cleveland-based Aleris provides flat-rolled aluminum products for the automotive, aerospace, and building and construction industries.
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