Zhongwang USA, a Chinese-owned aluminum company, announced that its merger agreement with Aleris Corporation has been terminated per a mutual agreement.

The companies entered into the $2.33 billion merger agreement in August 2016.

The merger was subject to approval from the Committee on Foreign Investment in the United States (CFIUS). In July 2017, CFIUS raised concerns about the transaction, and the parties withdrew their filing while extending the merger agreement to allow for additional discussions.

Aleris supplies aluminum to the building and construction industries, as well as the automotive and aerospace markets.

“While this is not the outcome we intended, we remain committed to our growth strategy and have made great strides over the past year in expanding our capacity and developing the capabilities required to meet the future demands of our industry. This includes our automotive expansion project in Lewisport, Ky., which is beginning to serve customers,” says Sean Stack, Aleris chairman and CEO. “I am proud of our employees’ focus and accomplishments over the past several months and appreciate the support we’ve received from customers. Aleris remains well-positioned for future growth, and we will continue to focus on serving our customers with excellence as we move forward.”

Zhongwang USA leadership expressed disappointment that the acquisition would not proceed.

“Through the proposed acquisition, Zhongwang USA was committed to preserving American jobs and investing substantial funds into Aleris, beyond the purchase price,” reads a company statement. “The Aleris acquisition was a win-win opportunity for American workers and Zhongwang USA, particularly in Kentucky, Ohio, Michigan and Iowa where Zhongwang’s substantial additional capital investment would increase productivity and American competitiveness while supporting in excess of 1,000 new jobs across four states.”

The company adds, “Although deeply disappointed by the outcome, this has been a constructive process for Zhongwang USA, and our executives have tremendous respect for the management and workers at Aleris — they are a world-class team.”

According to Zhongwang USA, the company and its investors will continue to pursue expansion opportunities, including positive, job-creating opportunities in the U.S. and other parts of the world.

When the merger was announced in August 2016, the Aluminum Extruders Council (AEC) was concerned about the potential deal.

“The announcement that Zhongwang intends to purchase Aleris raises very serious concerns for the entire industry,” said AEC president Jeff Henderson. “Zhongwang is a state-supported enterprise and has received large benefits and financing from the government of China. Zhongwang also has a long history of circumventing and evading duties in trade cases by shipping over a billion pounds of ‘fake’ extrusions to Mexico and Vietnam.”

In early December 2016, the U.S. Department of Commerce (DOC) declared that Zhongwang’s pallets were merely aluminum extrusions made of 1xxx alloy, cut-to-length and welded together in the form of a pallet and plainly subject to the existing antidumping and countervailing duty orders on aluminum extrusions from China. In March 2017, the AEC asked the DOC to expand its finding to include the 6xxx pallets.

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