Status Update:  Abandoned

 

Acquirer:  Zhongwang USA LLC (US); Liu Zhongtian (China)

Acquired:  Aleris Corporation (US)

Value:  Approx. US$2.3 billion

Industry:  Metals; Aluminum



Steel millUPDATE:  
Aleris Corporation’s planned acquisition by Zhongwang USA LLC has been abandoned after the merger agreement expired on November 12, 2017. (See Aleris Press Release, Zhongwang USA Acquisition of Aleris Will Not Proceed, November 13, 2017.)  “The merger was subject to customary regulatory approvals, including approval from the Committee on Foreign Investment in the United States (CFIUS).” (Id.) CFIUS previously raised concerns in July 2017 and, as a result, the parties “agreed to extend the termination date of the Merger Agreement a number of times and most recently agreed that the Merger Agreement would terminate on November 12, 2017.” (Id.)


Posted on August 9, 2017

Status: Withdrawn (2nd time)

As previously reported (see blog posts below), Aleris Corp. and Zhongwang USA LLC, withdrew their initial notification to CFIUS in February 2017 and refiled in the second quarter of 2017 “to obtain additional time to provide additional information, including possible measures to mitigate” CFIUS identified national security concerns.  (See Quarterly Report, Aleris Corp. Form 8-K, Ex-99.1, Aug. 9, 2017, SEC Filing.)  According to an Aleris regulatory filing, “CFIUS continues to raise national security concerns with the Merger and, as a result, Aleris Corporation and Zhongwang USA have withdrawn their most recent notice seeking approval of the transaction from CFIUS and continue discussions concerning the transaction.”  (Id.)  The transaction can be terminated “by either party on or before August 31, 2017, the date the transaction will automatically expire by its terms.” (Id.)


Posted on June 1, 2017

Status: Refiling

In a regulatory filing on May 26, 2017, Aleris Corporation stated that, in relation to the August 29, 2016 merger agreement with Zhongwang USA LLC, the parties “have refiled their joint notice with the Committee on Foreign Investment in the United States.”  (Aleris Form 8-K, May 26, 2017, SEC Filing.)  The filing also stated that, “to accommodate the extended process with CFIUS, the parties have agreed to extend the termination date of the Merger Agreement to August 31, 2017.”  (Id.)  On February 9, Aleris had previously stated that the parties had withdrawn their joint notice to CFIUS because of “identified national security concerns.”  (Aleris Ex-99.2, Form 8-K, February 9, 2017, SEC Filing.)


Posted on May 4, 2017

Status: Refiling Pending

As previously reported in February , Aleris Corporation and Zhongwang USA LLC (beneficially owned by entities affiliated Chinese national Mr. Liu Zhongtian and other investors and financial institutions) announced that they withdrew their initial CFIUS voluntary notice because of “identified national security concerns” so that they could “provide additional information, including possible measures to mitigate these concerns.”  (Aleris Earnings Release, Aleris Reports First Quarter 2017 Results, Ex-99.1, Form 8-K, May 4, 2017, SEC Filing.)  According to a recent security filing, the parties withdrew their notice in February 2017 and “intend to refile in the second quarter of 2017.” (Id.)  The parties are targeting closing by the second quarter of 2017, however, “[t]he Merger Agreement may be terminated by Aleris Corporation or Zhongwang USA on or before May 29, 2017.” (Id.)


Posted on February 14, 2017

Status:  Withdrawn 

Delaware based aluminum manufacturer, Aleris Corporation, has reported in a regulatory filing concerning its planned merger with Zhongwang USA LLC that “CFIUS has identified national security concerns with the Merger.”  (Aleris Ex-99.2, Form 8-K, February 9, 2017, SEC Filing.)  The regulatory filing stated that “[a]lthough CFIUS has not identified at this time measures that would mitigate these concerns, it has invited Aleris Corporation and Zhongwang USA to withdraw and refile their notice to obtain additional time to provide additional information, including possible mitigation, which Aleris Corporation and Zhongwang USA intend to do promptly.” (Id.)  Under the Agreement, the merger “may be terminated by Aleris Corporation or Zhongwang USA on or before May 29, 2017.” (Id.)


Posted on December 13, 2016

Status:  Upcoming/New Filing

On August 29, 2016,  Aleris Corporation, a Delaware corporation, Zhongwang USA LLC, a Delaware limited liability company, Zhongwang Aluminum Corporation, a Delaware corporation and a direct, wholly owned subsidiary of Zhongwang USA, entered into an Agreement and Plan of Merger pursuant to which Zhongwang Aluminum Corporation will merge with Aleris with Aleris surviving as a wholly owned subsidiary of Zhongwang USA, for consideration valued at approximately US$2.33 billion.  (See Aleris Form 8-K, Aug. 30, 2016, SEC Filing; Aleris Press Release, Aleris to be Acquired by Zhongwang USA LLC, Aug. 29, 2016.)    Zhongwang USA LLC is a subsidiary of China based Zhongwang International Group and is indirectly majority-owned by Mr. Liu Zhongtian, who is also the founder of China Zhongwang Holdings Limited, a Hong Kong listed company and the “second largest aluminum extrusions product developer and manufacturer in the world and the largest in Asia.”  (Aleris Press Release, Aleris to be Acquired by Zhongwang USA LLC, Aug. 29, 2016.)  Clearance from the Committee on Foreign Investment in the United States (CFIUS) is a condition to closing and the parties were to jointly file a notice to CFIUS “as soon as practicable” after signing the merger agreement.  (See Agreement and Plan of Merger, Section 6.4(c), Form 8-K, Ex-2.1, Aug. 30, 2016, SEC Filing.)

“Aleris is a global leader in the production and sale of aluminum rolled products.”  (See Aleris Overview on its website.)  The deal has been opposed by U.S. lawmakers who issued a letter to the Secretary of the Treasury urging CFIUS to reject the proposed acquisition.  (See Letter to Secretary Lew from various Senators, Nov. 2, 2016.)