Ternium offers to buy 26-% stake in Brazil's Usiminas: report

Ternium SA, Latin America's second-largest steelmaker, has offered to buy a 26-per cent voting stake in Usiminas, one of Brazil's biggest steelmakers, Exame magazine yesterday reported, citing a source familiar with the deal.

Luxembourg-based Ternium offered to pay 40 reais ($22.60) a share for the combined stake held by Brazilian conglomerates Camargo Correa and Grupo Votorantim in Usiminas, a 72 per cent premium over Usiminas' yesterday closing price at 23.25 reais.

According to Exame's source, Japan's Nippon Steel, the largest shareholder in Belo Horizonte, Brazil-based Usiminas with about 28 per cent voting stake, is unlikely to exercise its right of first refusal and both Camargo and Votorantim are willing to sell their stake at Ternium offer price.

Although Exame did not say what the total deal size would be, a September report from a local media said that CSN, Brazil's second-biggest producer of flat steel products, had offered to buy the combined stake of Camargo and Votorantim for around $3 billion.

CSN has been increasing its stake in Usiminas this year, to press for a board seat at the steelmaker - which is grappling with high flat steel imports, a strong currency and lack of self-sufficiency in raw materials.

Rio de Janeiro-based, state-owned CSN has been steadily increasing its stake in Usiminas this year in order to get a board seat and eventually takeover its rival.