CSN, a leading Brazilian steel and iron ore producer, has entered into a significant agreement to sell up to 11% of its iron ore mining subsidiary, CSN Mineração, to Japan's Itochu Corporation. This strategic move, which has been approved by CSN’s board under non-binding terms, is valued at approximately $635 million, based on a share price of $1.32 for CMin. The deal highlights the growing interest of international investors in Brazil's mineral resources and strengthens the ties between Brazilian and Japanese companies.
The proposed transaction involves the sale of CMin shares, with specific payment conditions, readjustments, and other clauses still to be negotiated by both parties. CSN has emphasized that the governance structure and control of CMin will remain unchanged, ensuring that the operational integrity of the subsidiary is preserved throughout this transition. This aspect is particularly important for maintaining investor confidence and operational stability within the company.
During the second quarter of 2024, CMin demonstrated robust performance by producing 14.42 million metric tons of iron ore, marking the second-highest quarterly production level in the company's history. This impressive output underscores the importance of CMin in CSN's overall operations and its strategic role in the global iron ore market. The production figures reflect not only the operational efficiency of CMin but also the increasing demand for iron ore in various sectors, particularly construction and manufacturing.
The completion of this deal is contingent upon several factors, including final approval from both CSN and Itochu, as well as clearance from Brazil’s competition defense authority, CADE. Regulatory approvals are a critical step in ensuring that the transaction adheres to Brazilian laws and maintains fair competition in the market. CSN's proactive approach to securing necessary approvals demonstrates its commitment to regulatory compliance and corporate governance.
