You are here
China's Zhongwang, Aleris extend merger deadline amid smuggling claims
[BEIJING] Chinese-owned aluminium firm Zhongwang USA and its acquisition target Aleris Corp have decided to extend a deadline to complete their merger by two weeks, according to representatives of the two companies.
The extension comes amid reports of smuggling allegations made this week by the US Department of Justice against Chinese aluminium tycoon Liu Zhongtian, owner of Zhongwang USA.
It was not clear if there was link between the complaint filed this week by the Department of Justice and the extension. "We remain in discussions with Zhongwang USA on the pending acquisition of Aleris," Jason Saragian, a spokesman for the Cleveland, Ohio-based manufacturer of aluminium rolled products, said by email. "To allow those discussions to continue, we have decided to extend our merger agreement through September 29," Mr Saragian said. The previous deadline lapsed on Friday.
A spokeswoman for Zhongwang, an aluminium extruder, confirmed the extension. Zhongwang USA is not part of Hong Kong- listed China Zhongwang Holdings Ltd, although Liu heads up both companies.
Zhongwang USA announced its intention to buy Aleris in August 2016. However, the deal has not yet been completed, and in June this year, 27 US senators urged the Treasury to reject the sale, calling it a "strategic misstep".
The Wall Street Journal reported that a complaint filed Thursday by the US Department of Justice accused an alleged Zhongwang affiliate, Perfectus Aluminum Inc, of evading US$1.5 billion in tariffs by illegally importing aluminium into the United States.
Zhongwang has yet to comment on the allegations but the US Aluminum Extruders Council (AEC) welcomed the action. "We want to applaud the Department of Justice's decision to begin civil proceedings against Zhongwang's affiliate," AEC president Jeff Henderson said in a statement.
The filing "is the culmination of a concerted effort by the AEC and its members in conjunction with Customs and the Department of Commerce to investigate Zhongwang's alleged attempts to avoid paying duties," Mr Henderson said.