Steelmaker Ternium to buy 27.7% of rival Usiminas for $2.66 billion
28 Nov 2011
Ternium SA, Latin America's second-largest steelmaker, has offered to buy a 27.7-per cent voting stake in Usiminas, Brazil's second biggest steelmaker, for 5.03 billion reais ($2.66 billion).
Luxemburg-based Ternium, which will fund the acquisition with a mixture of cash on hand and debt, is paying 36 reais per share, a premium of approximately 41 per cent to Usiminas' ordinary share last-six-months.
The stake is being bought from Brazilian conglomerates Camargo Correa SA, Grupo Votorantim and Caixa de Empregados de Usiminas, the steelmaker's workers pension fund.
As part of the deal, Usiminas largest shareholder Nippon Steel will acquire an additional 8.5 million common shares of Usiminas from Caixa de Empregados.
Post closing, Nippon Steel Corp, the world's fourth largest steelmaker, will hold 46.1 per cent of the Usiminas's voting rights, while Ternium and Confab, the Brazilian unit of steel producer Tenaris will together control 43.3 per cent and Usiminas's employees' pension 10.6 per cent.
With strategically located facilities near the main consumers of steel in Brazil and iron ore mines in the Serra Azul region, Usiminas is the largest flat steel producer in the country, with 9.5 million tons of crude steel capacity, and accounts for 28 per cent of total steel output in Brazil.
