After Holcim informed this Friday (10) that it agreed to sell its cement business in Brazil to CSN, the company led by Benjamin Steinbruch rose to the next level in another market niche.
With consolidated operations in steel and mining, the company must now rank among the three largest cement producers in the country. The investment was around US$ 1.025 billion.
“The acquisition is neutral in terms of credit for the CSN and it has no impact on its ratings because the cash requirements to fund the transaction will not harm the company’s currently solid liquidity,” says Moody’s Vice President Carolina Chimentie.
“In addition, the additional capacity of 10.3 million tons in the cement segment will help to further diversify CSN’s cash flow,” he said.
With the closing of the deal, the CSN Cements will have a total capacity of 16.3 million tons per year. 2017 data from Cimento.org placed the Votorantim at the top of the ranking, with 34.8 tons a year, and the InterCement second, with 15.9 t. Nassau, close to the table, produced 8.4 t.
“The company is acquiring the third largest cement company in Brazil and is growing in size. I see this as positive for when the window opens for the company’s IPO”, says Pedro Galdi, an analyst at Mirae Asset.
“An important strategic acquisition at a time when CSN substantially improved its capital structure with the proceeds from CSN Mineração’s IPO.”
“Relevant operational, logistical, management and commercial synergies are expected, with room for evolution of the product mix and expansion of the customer base, said CSN in a material fact.
Also according to CSN, the agreement is part of CSN Cimentos’ expansion strategy amid the recovery of cement consumption in Brazil, “demonstrating the company’s ability to assume a prominent role in the sector”.
In June, the company had already announced the acquisition of Elizabeth Cimentos and Elizabeth Mineração, which operates in the Northeast region, especially in Paraíba and Pernambuco. The deal was valued at R$1.08 billion.
In the second quarter, recorded net income of BRL 5.51 billion, of R$446 million a year earlier, with strong growth in sales volumes and price increases, ensuring a record operating result.
Net revenue totaled R$15.39 billion, up 147% from the second quarter of last year, with steel sales volume growing 28% and iron ore sales increasing 18%.
*With Reuters and Estadão Content