Hindalco's Novelis pares China presence with $265 million sale of two units

Novelis Inc., the US-based aluminium producer owned by India's Hindalco Industries, has agreed to sell two of its wholly owned Chinese subsidiaries for $265 million, as it moves to pare its presence in the world's second-largest economy.

The divestment comes as foreign manufacturers reassess their exposure to China, where domestic competition and shifting global supply chains are reshaping business strategies. Novelis is among the world's largest producers of flat-rolled aluminium, supplying industries including automotive, beverage cans and aerospace.

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Under a definitive agreement, Novelis (China) Aluminum Products and Novelis (Shanghai) Aluminum Trading will be sold to China's Shenzhen Hongzhi Industrial Investment Co. or its affiliates, Hindalco said in an exchange filing on Sunday. The deal also includes a potential earn-out of up to $10 million, subject to the achievement of specified conditions.

The agreement was signed on November 14, with the transaction expected to close within 12 months, subject to regulatory approvals, the filing said.

The two subsidiaries reported net sales of $376 million in the financial year ended March 2026, accounting for about 1% of Hindalco's consolidated net sales. Their sale will reduce Novelis' direct operating presence in China, even as the company continues to serve global customers across key aluminium-consuming sectors.

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The deal also follows a period of management and operational developments at Novelis. The company recently announced the departure of its chief financial officer, Dev Ahuja. Months earlier, Hindalco reported a decline in profit, partly attributing the performance to costs arising from a fire-related disruption at Novelis' US operations.