RIO DE JANEIRO (Dow Jones) -- Brazilian steelmaker Usinas
Siderurgicas de Minas Gerais (USIM5.BR, USNZY), or Usiminas, will
have a "solid" controlling shareholders' group with the entry of
Latin American steelmaker Ternium SA (TX), Usiminas' Chief
Executive Officer Wilson Brumer said Monday.
Usiminas' two main controlling shareholders will henceforth be
Nippon Steel Corp. (5401.TO), with 29.45% of the Minas Gerais-based
steelmaker's ordinary shares and Ternium, with 27.66% of the
shares, after a "harmonious" accord by which Ternium purchased the
ordinary Usiminas shares owned by Brazilian groups Camargo Correa
and Votorantim, Brumer said. Usiminas' employees pension fund also
sold 3.38% of Usiminas' voting capital to Nippon Steel and Ternium.
The deals are still subject to approval by Brazil's anti-trust
authorities and Nippon Steel's board, Brumer said.
"This will create a pretty solid group at control, with the
involvement of two major steelmaking groups," Brumer told analysts
on a conference call. "This can only result in a better Usiminas
with a greater added value: This is a win-win situation for all
concerned."
No changes are foreseen in Usiminas' strategy or direction as a
result of Ternium's entry and the Usiminas control group continues
with the same percentage of Usiminas' total capital, the CEO
said.
Nippon Steel has been a partner in Usiminas for almost 50 years
while Ternium and Usiminas have had business partnerships for 20
years, Brumer said.
Usiminas isn't meanwhile planning any new investment in steel
slabs production as a result of Ternium's entry into the company,
and there is no discussion taking place between the companies on
this subject, Brumer said.
"It's not worth producing slabs for export these days," Brumer
said, citing what he considers relatively low current slab sales
prices of about $530 a metric ton and high Brazilian investment
costs in new steelmaking facilities. "There's a world over-capacity
in slabs," he said.
--By Diana Kinch, Dow Jones Newswires; 55 21 7564 4495;
diana.kinch@dowjones.com