Commission to preserve divestment of former Aleris plant in Belgium
To obtain clearance of its acquisition of Aleris in 2019, Novelis offered to divest the plant in binding commitments but failed to close the sale within the deadline set in those commitments, despite extensions granted.
As a result of the breach of this condition of the Commission's 2019 clearance decision, the decision and the commitments became inapplicable. The Commission therefore adopted provisional interim measures to preserve competition.
Novelis later sold the Duffel plant, as authorised by the Commission in compliance with the interim measures.
The decision adopted will ensure that competition is preserved by imposing final measures on Novelis. These include obligations similar to the commitments originally attached to the 2019 clearance decision, also to ensure that the divested Duffel plant remains a competitive and autonomous player on the market.
On 1 October 2019, the Commission approved, under the EU Merger Regulation, the acquisition of Aleris by Novelis. To address the Commission's competition concerns, the parties offered to divest Aleris' entire aluminium automotive body sheet business in Europe, including its production plant in Duffel, Belgium. The decision was conditional on compliance with the commitments offered by Novelis.
On 7 April 2020, the Commission approved Liberty House (‘Liberty') as a suitable purchaser for the Duffel plant under the commitments. The Commission had already cleared the acquisition of the Duffel plant by Liberty under the normal merger review process on 20 January 2020.
The Commission granted several extensions of the closing deadline following requests from Novelis. Nevertheless, Novelis failed to close the sale of the Duffel plant within the extended closing deadline.
As the 2019 clearance decision and the commitments attached to it became inapplicable as soon as the deadline expired, on 1 September 2020, the Commission ordered provisional interim measures pursuant to Article 8(5) of the Merger Regulation. These were aimed at preserving competition as well as the plant's viability and competitiveness.
On 30 September 2020, Novelis closed the sale of the Duffel plant to Liberty following the authorisation by the Commission in compliance with the provisional interim measures.
Following the sale of the Duffel plant to Liberty, the Commission considers that final measures are necessary to ensure that the sale remains effective, and that the plant's viability and competitiveness are protected. Therefore, pursuant to Article 8(4)(b) of the Merger Regulation and in order to restore as far as possible the situation that existed before the implementation of the Novelis/Aleris transaction, the Commission has ordered a number of measures, with which Novelis must comply.
These measures include, among others, a non-reacquisition measure preventing Novelis from re-acquiring all or part of the Duffel plant, as well as a non-solicitation measure preventing Novelis from soliciting the Duffel plant's customers or standing orders. They also reproduce other safeguards and obligations typically required under the commitments, which in this case became inapplicable. The decision also provides for transitional agreements, measures on the trustee's mandate, as well as on investment funding for the benefit of the plant. Finally, daily penalty payments are foreseen in the event Novelis fails to comply with the measures. ■