Source: Daily Economic News

China's largest overseas acquisition by aluminium processing companies was announced yesterday.

On August 29, ZHONGWANG USA LLC announced that it would sign an acquisition agreement with Aleris Corporation, the world's top research and development manufacturer of high-end aluminium calendering products, and that the company would conduct the transaction in accordance with the company's value of about $2.33 billion, including $1.11 billion in equity transfers and about $1.22 billion in net debt. Business. After the acquisition, Zhongwang USA will own all the shares of Aili.

It is understood that Zhongwang USA is an industrial investment company owned by aluminium industrialist Liu Zhongtian through Zhongwang International Group Limited. Apart from Zhongwang USA, Liu Zhongtian is also the chairman and founder of Zhongwang Holdings Co., Ltd. (hereinafter referred to as Zhongwang China, stock code: 01333), the second largest industrial aluminium extrusion product R&D manufacturer in the world and the largest industrial aluminium extrusion product manufacturer in Asia. After the acquisition of AILI, he will manage two target markets and complementary products of Zhongwang and AILI in China.

Aili brand, team, strategy unchanged, loyal and prosperous domestic and foreign markets go hand in hand

Under the acquisition agreement, Zhongwang USA will acquire all of Erie's assets, including its aluminium calendering facilities and management departments in North America, Europe and the Asia-Pacific region.

Zhongwang America promises that after the acquisition, Eli will continue to use the existing brand name "Aleris", and its headquarters in Cleveland, Ohio, will remain unchanged, and will continue to operate and manage independently. Zhongwang USA will also adopt an active employee retention plan to motivate and motivate existing management teams. "Eli's excellent management team is one of the reasons for our investment." According to Zhongwang, the head of the acquisition project in the United States, after the completion of the transaction, the current management team of Aili will continue to manage the company and implement the company's strategy, including several key growth projects to strengthen Aili's strength. At the same time, Zhongwang America also promises to maintain its service guarantee to existing customers, as well as all contracts and commitments.

Aili welcomes and looks forward to the statement of loyalty and prosperity of the United States. Sean Stack, Erie President and CEO, said: "We are very excited about this strategic equity shift, which will prompt us to accelerate the pace of strategic capacity expansion and maintain our leading position in the field of existing aluminium processing products while providing high value-added high-end products to meet the global automotive and aerospace market demand."

Relevant data show that by the end of 2015, Aili's total income was $2.9 billion, 52% from North America and 45% from Europe. Among them, Erie's Koblenz factory in Germany is one of the best factories in global aerospace and commercial aluminium calendering products, and also one of the main suppliers of Airbus and Boeing; while Erie Zhenjiang aluminium calendering factory, which fully borrows the design concept of German Koblenz factory, is equivalent to a "re-edition" to meet the needs of Boeing, Airbus and other manufacturers in the Asia-Pacific region. To provide high-quality aeronautical sheets. At present, Ali Zhenjiang Aluminum Calendering Factory has acquired all the qualifications of aerospace supply, and has begun to supply high-end customers such as Airbus and Boeing.

Zhongwang International's listed company, Zhongwang China, has the world's leading strength in aluminum extrusion and deep processing, and is currently the second largest manufacturer of industrial aluminum extrusion products in the world and the largest manufacturer in Asia. There are more than 90 extrusion production lines, which are the largest number of large extruders in the world. Their products are widely used in transportation, mechanical engineering, and power and energy fields. In recent years, Zhongwang has also invested in the development of high value-added aluminium calender projects, mainly producing high-end aluminium calender products to serve the Chinese market.

Industry insiders said that Aili's products are mainly used in the automotive and aerospace industries. The main markets are North America and Europe. Taking over Aili in an all-round way is an important measure for Liu Zhongtian to expand overseas markets. Meanwhile, for Zhongwang, a Chinese company founded by Zhongwang, which mainly focuses on the domestic market, it also realizes the dual complementarity of market structure and product supply.

Strategic Investors Replace Financial Investors to Encourage Accelerated Opportunities

As a world-class aluminium processing enterprise, AILI has 13 production bases in North America, Europe, Asia and other regions, and 5 R&D centers of major products all over the world. Eli has the world's leading market share in high-end aluminium calendering products such as aerospace panels, automobile body panels, heat exchangers and so on. Its long-term partners include not only Airbus, Boeing, Bombardier and other aircraft manufacturers, but also well-known automobile brands such as Audi, BMW and Mercedes-Benz.

High-end aluminium processing industry itself belongs to the industry with a long investment return cycle. In recent years, in order to meet the trend of automobile lightweight, many foreign leading aluminium processing enterprises, including Aili, have increased their capital investment in ABS plate capacity building.

Since 2010, Eli has been held by pure financial investors, namely investment funds, including Oaktree Capital Management, Apollo Management and Skaty Advisors. Aili and Zhongwang's "love at first sight" is based on the fact that Liu Zhongtian, the founder of Zhongwang, has insisted on investing in high-end aluminium processing industry for decades. He is an industrialist who invests strategically, rather than a sole financial investor. As a result, Aili has responded enthusiastically to the acquisition from Zhongwang USA.

"We believe that Zhongwang America, a new strategic shareholder, can provide us with more flexible financial support so that we can have sufficient funds for long-term investment." Liu Zhongtian also made a commitment to Aili's future: "We will fully support and cooperate with Aili management team to implement its existing development strategy, and provide it with more abundant market resources and more flexible funds and operations, to help Aili accelerate its development on the basis of existing stability."

The industry believes that after the completion of the transaction, Eli will change its private equity model to be held by strategic investors, which will benefit the company's long-term development. For example, loyalty and Wang will inject momentum into all of Eli's strategic projects, including the expansion of automotive aluminium alloy sheets in Lewis County, Kentucky, to meet the growing demand for aluminium alloy body sheets in North American automotive industry.

"Mr. Liu Zhongtian has been operating in the aluminium processing industry for many years, and his market vision and investment drive are obvious to all in the industry. In addition, unlike the simple financial investors who value short-term returns, Zhongwang pays more attention to the long-term development prospects and growth potential of enterprises. It is also easier for investors and management to reach consensus at the strategic level. Zhongwang, head of the acquisition project in the United States, said.

Strong merger helps Zhongwang develop by leaps and bounds

For the synergy effect after the completion of the transaction, industry experts said they were very optimistic. Document Jun, vice president of China Nonferrous Metals Association, said: "From the acquisition agreement signed by the two sides, it is very likely to maintain a dual-brand parallel model, that is, under the flag of Zhongwang International, with the Aili brand focusing on high-end aluminium calendering products such as aerospace, and the Zhongwang brand focusing on aluminium extrusion and deep processing products. This strategy, on the one hand, enables Aili to continue to expand more high-end markets by virtue of its good international brand image; on the other hand, it also enables Zhongwang of China to continue to consolidate its leading position in the field of aluminium extrusion and further expand to the global market.