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Ternium to Acquire Controlling Interests in Steel Companies in Colombia and Panama
04/12/2010 - Ternium S.A. has entered into a definitive agreement to acquire a 54% ownership interest in Colombia-based Ferrasa through a capital contribution of US$74.5 million. Ternium also has agreed to purchase a 54% ownership interest in Ferrasa Panamá for US$0.5 million.
Ternium S.A. has entered into a definitive agreement to acquire a 54% ownership interest in Colombia-based Ferrasa through a capital contribution of US$74.5 million. Upon completion of this transaction, Ferrasa will have a 100% ownership interest in Sidecaldas, Figuraciones, and Perfilamos del Cauca.
Ferrasa is a long and flat steel products processor and distributor. Sidecaldas is a scrap-based long steel making and rolling facility, with an annual production capacity of about 140,000 tonnes. Figuraciones and Perfilamos del Cauca manufacture welded steel tubes, profiles, and beams. These companies have combined annual sales of approximately 300,000 tonnes, of which approximately 70% are long products and 30% are flat and tubular products, used mainly in the construction sector.
The transaction, which is subject to Colombian antitrust clearance and other customary conditions, is expected to close in the third quarter of 2010. Upon its completion, Ferrasa is expected to have consolidated financial debt of approximately US$120 million.
Ternium also has agreed to purchase a 54% ownership interest in Ferrasa Panamá for US$0.5 million. Ferrasa Panamá is a long steel products processor and distributor based in Panama, with annual sales of about 8000 tonnes.
The former controlling shareholders will have an option to sell to Ternium all or part of their remaining 46% interest in each of Ferrasa and Ferrasa Panamá, and Ternium will have an option to purchase all or part of that remaining interest at any time after the second anniversary of the closing.
Through these investments, Ternium expects to expand its business and commercial presence in Colombia, which the company notes is experiencing significant growth and is presently the fifth largest steel-consuming market in Latin America, as well as in Central America.
Ternium is a leading steel company in Latin America, manufacturing and processing a range of flat and long steel products for customers active in the construction, home appliances, capital goods, container, food, energy, and automotive industries. With its principal operations in Mexico and Argentina, Ternium serves markets in the Americas through its integrated manufacturing system and extensive distribution network. The company has an annual production capacity of approximately 9 million tonnes of finished steel products.
