(Yicai Global) Nov. 4 -- Aleris International, Inc. asserted that only a minute portion of its gross production goes towards national defense, but the acquisition by Chinese aluminum company Zhongwang USA LLC of Aleris has still roused opposition from American senators, who argue it will directly damage America's national security.
China Central Television reports that, on Nov. 2, 12 US senators jointly wrote to treasury secretary Mr. Jack Lew to ask the government to block the acquisition by Zhongwang International Group Ltd. of Aleris, claiming that it directly harms US national security. The letter states that Chinese enterprises, including state-owned and state-held ones, may be affiliated with the Chinese army, which exposes the US to the risk that American technologies may be stolen by those who should not hold them. The fear is the transaction would directly injure US national security, including damaging its production bases of sensitive technologies.
At the end of August, Zhongwang USA announced it had signed an agreement with Aleris on the acquisition, and that Zhongwang USA will pay around USD2.33 billion, in line with Aleris's corporate valuation, including USD1.11 billion by way of an equity transfer, and about USD1.22 billion in net debts. After the acquisition, Zhongwang USA will own all the equity of Aleris.
Zhongwang USA is an industrial investment company owned by businessman Liu Zhongtian that deals in aluminum via Zhongwang International Group, Ltd.
Previously, a spokesman for Aleris noted that "Our facilities in the US produce aluminum for car and truck exteriors, gutters and roofing material. Less than one percent of our sales go into defense applications, and none of these goods are produced in the US," The Global Times reports.
A spokesman for the Chinese company said the acquisition will bring more resources and capital for Aleris, which will still operate independently after the acquisition.