DOJ And Merging Parties Agree On Unprecedented Arbitration Procedure To Resolve Merger Challenge

WHAT HAPPENED:

• On September 4, 2019, the US Department of Justice's Antitrust Division (DOJ) sued to block Novelis Inc.'s proposed $2.6 billion acquisition of Aleris Corporation.
• DOJ alleged that the transaction would combine two of only four North American producers of aluminum auto body sheet (ABS). DOJ further alleged that Aleris was a new and disruptive rival supplier of aluminum ABS whose expansion into the North American market immediately impacted pricing.
• Prior to DOJ's suit to block the transaction, the merging parties and DOJ agreed that the dispute boiled down to a single dispositive issue: whether aluminum ABS constitutes a relevant product market, and specifically, whether the market for aluminum ABS also includes steel ABS.