Twelve U.S. senators urge security rejection of China aluminum M&A deal – by David Lawder (Reuters U.S. – November 2, 2016)

WASHINGTON – Twelve U.S. senators urged on Wednesday that a national security review panel reject Chinese aluminum giant Zhongwang International Group Ltd’s proposed $2.3 billion purchase of U.S. aluminum products maker Aleris Corp.

The senators asked Treasury Secretary Jack Lew in a letter to launch a review of the deal by the Committee on Foreign Investments in the United States and “ultimately reject it” on grounds that it would damage the U.S. defense industrial base.

“Zhongwang’s purchase of Aleris would directly undermine our national security, including by jeopardizing the U.S. manufacturing base for sensitive technologies in an industry already devastated by the effects of China’s market distorting policies, and creating serious risk that sensitive technologies and knowhow will be transferred to China, further imperiling U.S. defense interests,” the senators wrote.

The deal, announced just over two months ago, would give one of the world’s largest makers of extruded aluminum products access to U.S. technology and customers, which include Boeing Co and U.S. and European automakers that are increasingly turning to aluminum.

It comes as another Zhongwang subsidiary is embroiled in a dispute over U.S. import duties amid broader trade tensions between the U.S. aluminum industry and China. The U.S. Commerce Department is currently investigating China Zhongwang Holdings Ltd over allegations that it has been evading U.S. import duties on extruded products by shipping them through third countries.

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