1. Hindalco Industries Ltd., bought Novelis Inc. for $3.4 billion, to gain a fifth of the high-end aluminum market and access to U.S. customers including Coca-Cola Co. and General Motors Corp. The purchase wiped out $770 million of Hindalco's market value on concern the Mumbai-based group may take on too much debt.
2. It will borrow $3.1 billion, boosting the debt-equity ratio to 1.4 from 0.1 increasing annual funding cost by $248 million
3. It is tripling aluminum production to 1.5 million tons by 2012 to become one of the world's five largest producers
4. It is competing with Glencore International AG, the world's biggest commodities trader, Vedanta Resources Plc and six others for a 76.8 million euro ($104 million) smelter in Bosnia.
5. The acquisition by Hindalco gives Novelis access to a low-cost base to buy semi-finished aluminum and raises Hindalco’s revenue.
What makes for an industrial fairy tale?
Vertical and horizontal integrations that create:
Inorganic growth into great new markets
Organic growth in old and new markets
Cost synergies
Conviction to brave the wounds of debt
[Click here for full story at: BLOOMBERG.COM]
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment