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Ternium takes 43% of Usiminas in pact with Nippon Steel - 29 November 2011

Ternium, the steelmaking arm of Italian-Argentinian conglomerate Techint, has agreed terms for the purchase of shareholdings held by Votorantim and Camargo Correa, plus the employees' pension fund (CEU) in Usiminas, the largest steel producer in Brazil, according to a company statement obtained by Steel Business Briefing.

Ternium will pay around R$5bn (US$2.7bn) to buy 27.7% of Usiminas’ voting shares. The purchase will be made by Ternium and its subsidiaries Siderar and Confab (subsidiary of Tenaris). The first two will pay the equivalent of R$4.1bn, while Confab will finance R$900m.

In addition, Japan's Nippon Steel has also increased its holding in Usiminas by acquiring 1.69% stake of ordinary shares from CEU. As a result, the Usiminas control group – which holds 63.86% of voting rights – will comprise Nippon Steel Group 46.12%, Ternium/Tenaris Group 43.31% and CEU 10.6%.

Although not yet detailing the potential synergies between the new controlling shareholders, Usiminas president Wilson Brumer said there will be many opportunities to work together. Ternium said that the partners will be able to better supply products region-wide from Mexico through to Argentina.

At Nippon Steel, a spokesman told SBB: “Ternium is our partner in the Mexican auto sheet plant now under construction, and Confab, the Brazilian pipemaker and Ternium group company, is a major Usiminas customer of plates (so) having Ternium as partner in Usiminas has great merit”. Usiminas’s iron ore operations could also support Ternium group mills, he added.

According to Usiminas, the transaction is expected to be completed in January 2012, and the new shareholder agreement between the controlling parties is expected to be effective at the same time, after approval by Nippon Steel's board of directors.

 

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