CSN Said to Offer $3 Billion for ThyssenKrupp Plants
Cia. Siderurgica Nacional SA (SID), Brazil’s third-largest steelmaker by output, offered about $3 billion to buy the two ThyssenKrupp AG (TKA)’s plants in the Americas, according to two people familiar with the matter.
CSN, as the Sao Paulo-based company is known, is among two companies that will participate in the final round of negotiations, said one of the people, who asked to not be identified because the discussion is private. Ternium SA (TX), the second-largest steelmaker in Latin America, also remains in negotiations, the people said.
ThyssenKrupp, Germany’s biggest steelmaker, initially attracted about eight bids for the unprofitable U.S. and Brazilian plants, two people familiar with the matter said Oct. 11. About six bidders remained after ThyssenKrupp asked them to resubmit higher bids, two people familiar with the matter said on Nov. 19. Now only two bidders have proposals, the people said.
ThyssenKrupp Chief Executive Officer Heinrich Hiesinger said in August he wants to sell the Americas unit for its book value of about 7 billion euros ($9.1 billion).
CSN’s American depositary receipts fell 6 percent to close at $4.83 in New York. The Sao Paulo-traded shares declined 6.2 percent to 10.38 reais in extended trading.
Officials from CSN’s press office in Sao Paulo declined to comment on the deal. ThyssenKrupp, based in Essen, Germany, declined to comment on the bids.
Ternium CEO Daniel Novegil said in a third-quarter conference call that it “makes sense for us to check out if there is an integration opportunity” with ThyssenKrupp, according to an e-mailed statement from the Luxembourg-based firm. The company declined to comment on the negotiations.
ThyssenKrupp announced in May that a sale of its plants in Alabama and Rio de Janeiro is among “strategic options” amid rising building costs and project delays. The company was already divesting assets contributing about a quarter of annual revenue before that decision, including a stainless-steel business.
ThyssenKrupp started operating the Brazilian plant in 2010, two years later than originally planned, to provide steel slabs to its mills in Alabama and Germany. The two Americas plants, which required ThyssenKrupp investments of more than 10 billion euros, according to Hiesinger, were meant to work as an integrated network.