Ternium SA has agreed to buy 100 percent of ThyssenKrupp AG’s Brazilian mill CSA Cia Siderúrgica do Atlantico SA for 1.26 billion euros ($1.33 billion), ending five years of unsuccessful efforts by the German company to exit Latin America’s largest economy.
Under terms of the deal, which was announced late on Tuesday, Ternium (TX.N) will also assume around 300 million euros that CSA owes to Brazil state development bank BNDES.
Reuters reported in October that ThyssenKrupp and Ternium, a steelmaker in the Italian-Argentine Techint Group of industrial companies, were in advanced talks.
In a statement, Daniel Novegil, Ternium’s chief executive officer, said the additional slab production from CSA will generate “new integration opportunities” with existing units in Mexico and Argentina.
ThyssenKrupp sold the mill for a much lower price than the $3 billion initially expected by analysts and investors. CSA, the largest foreign investment project ever in Brazil, had an estimated cost of about $10 billion and has been operating since 2010.
The CSA plant, which is located in the city of Santa Cruz in Brazil’s Rio de Janeiro state, has operated for six years with pre-license authorization after being the target of several pollution lawsuits. It only won a permanent operating license late last year.
At the start of the decade, ThyssenKrupp decided to reduce exposure to steelmaking to concentrate on more profitable businesses including elevators, submarines, and car parts and to grow in Europe.
The company said in a statement the CSA sale was “another big step” of its strategy.
ThyssenKrupp was forced to become the sole owner of CSA last April after former partner Vale SA (VALE5.SA), the world’s No. 1 iron-ore producer, exited for a token sum.
Vale announced at the time that it would have the right to receive part of what ThyssenKrupp would receive in a future sale, but the German group did not mention any payment to Vale in the statements announcing the sale.
Source: Mint