Texas Pacific to Buy Aleris for $1.7 B

Elena
08 Aug, 2006
New York City

The deal is expected to be completed early next year. Under the terms of agreement Aleris stockholders will receive $52.50 for each common share, a premium of nearly 27% to Aleris''s Monday closing price of $41.39.

[R]8:00AM Texas Pacific to buy Aleris for $1.7 billion.[/R]
Aleris International Inc. ((ARS)), aluminum and zinc producer, announced that it agreed to be acquired by Texas Pacific Group for $1.7 billion in cash. The private-equity firm also agreed to assume or repay $1.6 billion of debt, with debt financing committed by Deutsche Bank. The deal is expected to be completed early next year. Under the terms of agreement Aleris stockholders will receive $52.50 for each common share, a premium of nearly 27% to Aleris''s Monday closing price of $41.39.

Aleris, formed in the 2004 merger of Imco Recycling Inc. and Commonwealth Industries Inc., ranks as one of the largest recyclers of aluminum and zinc in the world and one of North America''s leading manufacturers of common-alloy sheet from recycled aluminum, serving customers in transportation, building and construction, and consumer durables industries. Texas Pacific will acquire a company that operates 50 production facilities in North America, Europe, South America and Asia. Last week, Aleris completed the purchase for about $1.1 billion of rolling and extrusion businesses previously.


[R]7:30AM Japanese stocks soared, leading the entire region higher.[/R]
Asian markets finished higher on Tuesday. The Nikkei 225 Average gained 2.05% to close at 15,464.66 as exporters such as Toyota and Fujitsu led the gainers. Toyota Motor gained 2.65% and Honda Motor added 2.67%. Electronics maker Fujitsu Ltd advanced 2.33%. Oil explorer Inpex Holdings jumped 2.73% and refiner, Nippon Oil Corp, rose 1.96%.

Hong Kong''s Hang Seng Index gained 0.56% to finish the day at 17,048.20 as telecom, property and energy shares all put in a strong showing. China Mobile, Henderson Land and and CNOOC Ltd. were among the advancing stocks.

China''s Shanghai Composite gained 2.1%, South Korea''s Kospi Index advanced 1.67% and Australia''s S&P/ASX 200 index added 1.27%, with miners BHP Billiton and Rio Tinto climbing in spite of a strike in a key Chilean copper mine jointly owned by the two firms. Korean mobile-phone maker, LG Electronics, rose 1.7%.


[R]6:30AM European markets advanced as crude oil prices eased.[/R]
European markets rose on Tuesday. The FTSE 100 in London was 0.2% higher at 5,842.6, the Xetra Dax in Frankfurt nudged up 0.8% to 5,668.78 and the CAC-40 in Paris advanced 0.5% at 4,983.28. In spite of the retreat most oil companies advanced with Neste Oil up 1.4%, Norsk Hydro gaining 0.9% and Statoil adding 0.8. The sector as a whole though was pushed lower by BP’s 1% retreat in continued fallout from its shutdown of the Prudhoe Bay field.

Metrovacesa, the Spanish property company, advanced 2.7%, as Spain’s stock market regulator said it would not rule on an improved offer for Metrovacesa until September. Salzgitter advanced 5% after the German steel maker sold its entire 17% stake in Vallourec, a French steel tube manufacturer. Vallourec shares slipped 4.4%.

Rheinmetall, a German car parts and defence group, plunged 3.8% on disappointment with a 1.4% rise in first-half operating profit and Swiss reinsurer Converium rose 0.7% after beating forecasts with second-quarter net profit.

Light sweet crude oil for September delivery declined 28 cents to $76.70 a barrel in midmorning, while September Brent at London''s ICE Futures exchange fell 41 cents to $77.89 a barrel. Gold traded at $646.00 an ounce, down $2.50 an ounce from Monday''s close of $648.50.

The euro on Tuesday continued its slight slip against the U.S. dollar ahead of a meeting by the Federal Reserve. The euro purchased $1.1.2835 in early European trading, marginally below its level of $$1.2839 in New York late Friday. The British pound fell to $1.9052 from $1.9061. The dollar gained advanced the Japanese currency, rising to 115.08 yen from 115.07 yen.