OREANDA-NEWS. December 7, 2011. Usiminas – Latin America’s biggest flat steel group and leading player in the Brazilian market – has just reaped the fruits of its value generation strategy in the steel business. Through a new Shareholders Agreement valid up to 2031, a new partner joins Usiminas and brings its strong presence in industrial projects in Brazil as a major contribution: the Ternium/Tenaris group acquired 27.66% of the company’s common stocks. Moreover, the Nippon Group, led by Nippon Steel Corporation, consolidated its interests and now holds 29.45% of Usiminas’ common stocks. The controlling group includes also Usiminas Employees’ Pension Fund, with 6.75% of the common stocks.

By including among its major stockholders steel-related corporate groups, Usiminas further consolidates its leadership position in the Brazilian flat steel market, strengthens its governance structure through a strategic, versatile management and opens new business opportunities. The ultimate outcome will be increasing competitiveness.

Through its affiliated company Tenaris Confab, the Ternium/Tenaris group has played an important role in several Brazilian infrastructure projects, particularly in the energy and petrochemical industries, whose market outlook is quite positive. On top of being one of Usiminas’ main business partners and steel consumers, Tenaris Confab has already entered into several business agreements with Usiminas Mecanica (Usiminas arm in the capital goods and service business), like projects for Alunorte expansion (in the state of Para) and Petrobras’ Abreu Lima Refinery (in the state of Pernambuco).

The Nippon group, for its turn, has a long history of partnership with Usiminas, marked by intensive technological exchange and strategic allocation of investments. The production of state-of-the-art heavy plates for the pre-salt layer oil and shipbuilding industries and the duplication of the high value-added galvanized steel line are among the most recent cases of joint investments by Usiminas and the Nippon group. Upon their completion during 2010 and 2011, such investments increased the supply by Usiminas of high value-added steels to the Brazilian market.

The Employees’ Pension Fund, another important stockholder of Usiminas and one of the largest players among Brazil’s private pension funds (with approximately 35,000 participants), remained in the controlling group and has obtained additional funds to diversify its investments.

The new Shareholders Agreement in detail

In order to increase its holding in Usiminas from 27.76% to 29.45%, the Nippon group acquired a 1.69% stake of common stocks from the Employees’ Pension Fund. The 27.66% interest to be held by Ternium/Tenaris results from the acquisition of part of the stocks held by the Employees’ Pension Fund and all the stocks previously owned by Camargo Correa/Votorantim, which will no longer be a shareholder.