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Aluminum maker faces US security review

(China Daily)
Updated: 2016-11-07 09:05

View of aluminium manufacturer China Zhongwang's plant in Tianjin. Provided to China Daily

US lawmakers are urging Treasury Secretary Jack Lew to review and reject a Chinese company's acquisition of a US aluminum maker as a threat to national security, but the Ohio-based manufacturer denies the charge.

In August, Zhongwang USA LLC, a unit of aluminum maker China Zhongwang Holdings Ltd, said it would purchase US-based Aleris Corp in a deal that valued the company at about $2.33 billion. The Ohio-based Aleris supplies fabricated aluminum products to the aerospace, construction and automotive industries.

A letter from 12 US senators sent on Wednesday to Lew said the deal should be rejected because it would "directly undermine our national security, including by jeopardizing the US manufacturing base for sensitive technologies in an industry already devastated by the effects of China's market distorting policies", according to The Wall Street Journal and Bloomberg News.

The deal would create "serious risk that sensitive technologies and know-how will be transferred to China, further imperiling US defense interests," they wrote.

Senators signing the letter include Ron Wyden, Democrat of Oregon, Charles Schumer, Democrat of New York, and Rob Portman, Republican of Ohio. Wyden is ranking member of the Senate committee that oversees trade.

Lew chairs the Committee on Foreign Investment in the United States, which includes officials from the Defense, State and Justice departments and reviews acquisitions of US businesses by foreign buyers. It can impose conditions on transactions or recommend that the president block them.

In a statement, Aleris denied the deal would threaten national security, and noted that the company manufactures no products at its US facilities that have any defense applications.

"Less than one percent of our sales go into defense applications, and none of those goods are produced in the US. The technology to produce aluminum plate, which is used in some military applications, is standard production technology widely used in the aluminum industry," Aleris said in an e-mail.

Aleris said the transaction is a private acquisition by private investors who have no affiliation with a foreign government.

"This transaction is about the continued growth of Aleris under our current management team who will continue to operate the business independently as a separate, stand-alone entity," the company said.


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