Ternium, Tenaris To Grow In South American Steel Market With Usiminas Deal

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Estimated Price
$2,650.0MM
Description

To buy combined 27% stake in Brazilian steel producing, gaining total capacity of 9.5 million metric tons of steel per year

Siderar, and Argentine subsidiary of Ternium SA, Luxembourg, (NYSE: TX) and Confab Industrial SA, a subsidiary of Tenaris SA, Luxembourg, (NYSE: TS) plans to acquire a 27% stake in Usinas Siderúrgicas de Minas Gerais SA (Usiminas), Belo Horizonte, Brazil (Bovespa: USIM3) for approximately US$2.65 billion in cash.

Ternium and Tenaris will pay BRL36 per ordinary share (approximately US$19) for 139.7 million ordinary Usiminas shares, representing a a premium of approximately 41% to Usiminas' ordinary share last-six-months average U.S. dollar price.

Usiminas produces steel in the Americas, with major steel mills in Brazil with a total capacity of 9.5 million metric tons of steel per year.

These transactions seal a strategic alliance in Latin America among Nippon Steel, Usiminas and Ternium. The partnership will capitalize on upstream and downstream integration opportunities, such as the development of infrastructure and energy projects in Brazil.

These transactions are subject to customary conditions and applicable corporate approvals by the Nippon Group. Closing is expected to occur in January 2012.