On September 4, 2019, the DOJ filed an antitrust lawsuit in the Northern District of Ohio to block Novelis Inc.’s proposed acquisition of Aleris Corporation.
The DOJ alleges that the acquisition would substantially lessen competition in the North American market for rolled aluminum sheet for automotive applications, commonly referred to as aluminum auto body sheet. The complaint explains that steel companies are developing lighter, high strength steel varieties for the auto industry. But as Novelis has observed, high strength steel “is largely replacing existing mild steel” and “cannibalizing the existing material” (i.e., traditional steel). The threat of substitution from aluminum to high strength steel is, as Aleris confirms, “limited.” The price of aluminum auto body sheet is three or four times more expensive than traditional steel. The complaint further alleges that the transaction would combine two of only four North American producers of aluminum auto body sheet. The other two suppliers’ capacity is mostly committed to automakers. Thus, other automakers rely on Novelis and Aleris to produce aluminum body sheet for automobiles to make cars lighter, more fuel-efficient, safer and more durable.