Tenaris, the steel pipe maker of the Techint group, announced Thursday that it has signed an agreement through various subsidiaries buy for $21 million shares that Nippon Steel Corporation, Mitsubishi and MetalOne (the NSC group) hold in the controlling group of The Brazilian steel company Usiminas.
Usiminas is the company that produces flat steel for different sectors. It is the company that produces the plates for the pipes of the Nestor Kirchner gas pipeline, in Vaca Muerta.
With the operation, Tenaris to increase its stake in control group by 9.8%and Usiminas, a transaction subject to approval by the Brazilian antitrust authorities and will be paid in cash.
Thus, upon closing of the transaction, the Techint group will have a participation of 61.3% in the control group, while the NSC group will have 31.7% and the Usiminas employee pension fund the remaining 7.1%.
The Usiminas parent group holds the majority of the company’s voting rights and manages the company on the basis of a “mutual trust” agreement. That alliance was born after a series of virulent squabbles between the partners in 2018.
With this agreement, the shareholders have agreed to a commutation mechanism for the appointment of the chief executive officer and the chairman of the board of directors, as well as a mechanism for appointing other members of management.
The deal also included an exit mechanism which allowed both the NSC group and Techint to purchase part or all of the Usiminas shares from the other shareholder starting from 16 November.
Now, with the reorganization among the shareholders, a new corporate governance structure has been agreed in which Techint will appoint the majority of Board members of the Administration, the Chief Executive Officer and four other members of the executive management, and ordinary decisions can be taken with 55% of the majority of the shares of the controlling group.
Furthermore, within two years, Techint will be entitled to buy from the NSC group what remains of its stake in the Usiminas control group at the higher of 10 reais per share and the average price per share over the 40 working days immediately preceding the exercise date of the option.
On the other hand, the NSC group will have the option, at any time after the closing of the transaction, to sell these shares on the market, after having given Techint the opportunity to purchase them.
That controlling group, in turn, holds 68.6% of Usiminas’ voting capital.
Tenaris bills $6.5 billion e it employs approximately 23,000 people worldwide. Techint set foot in Brazil in 1960, with its subsidiary Confab. This company became part of Usiminas in 2012 and then increased its stake in 2016.
Source: Clarin
