The two leading U.S. secondary aluminum
smelter groups will become one during the third quarter,
provided no glitches derail a definitive agreement for Aleris
International Inc. to buy Wabash Alloys LLC from Connell LP for
Beachwood, Ohio,-based Aleris touched off
industry guesswork regarding possible plant closings and how
large a role will be given to Wabash executives in the combined
operation. The Wabash, Ind., company is the largest U.S.
producer of secondary aluminum alloys.
The industry perception was that Wabash
managers have closer relationships to scrap suppliers and die
casters than their counterparts at Aleris, created via a 2004
merger of Imco Recycling Inc. and Commonwealth Industries Inc.
Some of Aleris' key executives have a specialty chemicals
How much the Wabash company culture might
change under Aleris is one variable that other market
participants will be watching.
Neither company would elaborate on a short
press release, which put Wabash's 2006 revenue at a bit more
than $900 million and its employee roster at more than 700.
Meanwhile, Aleris, a larger company of worldwide scope and
several lines of business, reported 2006 aluminum recycling
revenue of $1.49 billion, some of it from Europe and Latin
The $194-million purchase price is subject to
certain adjustments for working capital and other items.
The U.S. aluminum specification alloy
industry, with scrap metal as its intake, has an estimated
total capacity of 300 million to 350 million pounds a month.
The higher figure was used recently by Wabash's president,
Wabash likely operates one third of that