Hindalco to acquire AluChem for $125 million as it expands into high-tech alumina

Saurabh Khedekar, chief executive officer of alumina business at Hindalco, said the acquisition will unlock synergies for Hindalco, including access to the US market and product portfolio expansion.

The acquisition will be carried out through Aditya Holdings LLC, a step-down wholly-owned subsidiary of Hindalco. It is expected to be completed by the upcoming quarter, subject to customary regulatory approvals.

Also read: India slaps five-year anti-dumping duty on Chinese aluminium foil, chemicals

This would be the company’s third acquisition of a metal company in the US. In 2007, Hindalco acquired Novelis Inc., a global leader in producing rolled aluminium products. In 2020, Novelis bought Aleris Corp., which produces a wide range of aluminium products, including for the aerospace industry.

Alumina is a white, crystalline compound of aluminium, which is an intermediate raw material for making aluminium. The acquisition will add an annual capacity of 60,000 tonnes from AluChem's three manufacturing facilities in Ohio and Arkansas.

“Hindalco plans to work with AluChem’s high-performance technology solutions and scale up production of ultra-low soda alumina products to drive larger global market share," Khedekar said.

Also read: 300% rally in five years! Multibagger metal stock declares record date for dividend payment

AluChem’s speciality alumina is used in electric vehicles, semiconductors, and precision ceramics.

"This partnership with Hindalco brings AluChem the ability and capital to scale up faster and build scale in North America," said Ronald Zapletal, founder of AluChem Companies Inc.

The acquisition “deepens our high value-added portfolio with differentiated products that drive profitability," said Satish Pai, MD of Hindalco Industries. “As alumina gains increasing relevance in critical and clean-tech sectors, AluChem’s advanced chemistry capabilities will significantly enhance our ability to serve these fast-evolving markets."

The metal arm of the Aditya Birla Group currently operates 500,000 tonnes of annual speciality alumina production capacity in India and aims to scale up to 1 million tonnes by FY30.

Also read: Nifty metal index jumps 2% on Israel-Iran ceasefire news: Tata Steel to SAIL share prices rise up to 4%

ICICI Securities maintained a positive view on Hindalco, citing aggressive capacity expansion plans, both domestic and international, amidst structural demand drivers for copper and aluminium, as per their report in June.

Hindalco reported a 66% growth in consolidated net profit to ₹5,283 crore for the quarter ended March compared to ₹3,174 crore posted in the year-ago period.