Vale announced this Thursday (28) that it has signed, together with its partners Posco and Dongkuk, a binding agreement with ArcelorMittal for the sale of their respective stakes in Companhia Siderúrgica do Pecém (CSP).
O enterprise value of the transaction is approximately US$2.2 billion, which will be used to prepay the net debt balance of approximately US$2.3 billion.
Completion of the transaction is subject to customary corporate and regulatory approvals, including the Administrative Council for Economic Defense (Cade). According to ArcelorMittal, approval is expected by the end of 2022.
Located in Ceará and founded in 2008, CSP is a joint venture between Vale (50%), Dongkuk (30%) and Posco (20%) and has an installed capacity of three million tons of steel slabs per year.
“This transaction reinforces Vale’s strategy of portfolio simplification, focusing on the main businesses and growth opportunities, guided by the disciplined capital allocation”, says the mining company.
ArcelorMittal says the acquisition brings several strategic benefits to the company, including the potential to expand the company’s position in the Brazilian steel industry, which has high growth potential, and capitalize on significant third-party planned investment to form a clean electricity hub. and green hydrogen in Pecém.
ArcelorMittal also says it can add the capacity to produce high-quality, cost-competitive slabs, with the potential to supply slabs within the group or sell in North and South America.
The deal should also allow for further expansion by ArcelorMittal, such as the option to add primary steelmaking capacity (including direct reduction of iron ore – DRI) and rolling and finishing capacity.
The company expects to capture more than $50 million of identified synergies, including selling, general and administrative (SG&A) expenses, purchasing and process optimization.
Source: CNN Brasil
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