Pursuant to the applicable legislation, Companhia Siderúrgica Nacional (“CSN”) published on this date a preliminary announcement of the launch of a public offer for the acquisition, by CSN itself or indirectly through one or more of its subsidiaries, of 100% of the 672,000,000 shares representing the capital stock of Cimpor – Cimentos de Portugal, SGPS, S.A., whose shares are traded on the Euronext Lisboa under the ticker CPR PL, for €5.75 per common share.
The acquisition of Cimpor will contribute to the formation of one the world’s largest cement producers, with an annual production capacity of 36 million tonnes of cement.
Cimpor is a Portuguese company with presence in 13 countries in 4 continents (Europe, Asia, South America and Africa). It is the national leader in Portugal, Cabo Verde and Mozambique and occupies important positions in Brazil, Egypt, China, Spain, Turkey, South Africa, Tunisia, Morocco, India and Peru. Its operations in emerging markets, with substantial growth potential, currently account for around 60% of its revenues.
Cimpor is within the top 10 world largest cement manufacturer in terms of market cap. In Brazil, it is ranked 3rd in terms of sales and 4th in production capacity, and it has consistently recorded one of the highest EBITDA margins in the sector.
In 2008, Cimpor recorded revenue of €2.1 billion, net income of €219 million and EBITDA of €586 million. Its net debt on September 30, 2009 totaled €1.8 billion.
About the offer
CSN may use part of its available cash and/or finance part or all of the acquisition with financing lines from first-tier banks.
The conclusion of the Offer will be subject to the acceptance by shareholders holding at least 50% plus one of the shares of Cimpor’s capital stock. The offer is also subject to certain conditions, including approval by the necessary regulatory and/or antitrust authorities.
Despite not having been in contact with Cimpor’s management, CSN expects to work together with the company’s management, which has ably conducted Cimpor’s business until now, in order to successfully conclude the transaction.
Regarding the acquisition, Benjamin Steinbruch, CSN’s CEO, commented: “Within CSN’s business focuses, this is one of the best diversification and internationalization opportunities we have come across in markets with enormous growth potential.”
The transaction will substantially expand and consolidate CSN’s presence in the cement segment, besides its outstanding leading position in the steel, mining and logistics segments.
The transaction will also increase CSN’s diversification in terms of products, new markets and geographical asset location, as well as reduce risks and add value to its shareholders.
CSN is currently finalizing the implantation of its first Brazilian cement plant in Volta Redonda. Production and sales began in May 2009, with sales in the states of Rio de Janeiro, São Paulo and Minas Gerais. Cement production and sales are expected to reach around 300,000 tonnes in 2009, 1 million tonnes in 2010 and 2.5 million tonnes in 2011. CSN’s production system is fully integrated, comprising a limestone mine, clinker plant, blast-furnace slag and a cement grinding unit, giving it a substantial competitive advantage in Brazil’s Southeast region.
CSN’s steel business is among the most integrated and competitive in the world, with one of the lowest production costs and highest EBITDA margins in the global steel sector. It has a total annual production capacity of 5.6 million tonnes of crude steel and produces a wide range of high value-added products.
The Casa de Pedra mine, which contains large reserves of high-grade iron ore, in addition to ensuring self-sufficiency in this mineral for steel production, also, together with NAMISA’s mines, positions CSN as a major iron ore exporter.
It also possesses strategic logistics assets with stakes in railways and operates port terminals, which permit the integration of its various businesses.
CSN is also self-sufficient in electricity. In addition to the thermal plant installed in the Presidente Vargas Steelworks, it retains stakes in the Itá hydro plant in the state of Santa Catarina and the Igarapava hydro plant in the state of Minas Gerais.
Rio de Janeiro, December 18, 2009
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