CSN, BNDES team up to buy Thyssen's Steel Americas-report

Tue Jan 29, 2013 7:00am EST

* BNDES could pump $2 bln into deal, Valor says

* CSN, BNDES may create new company after deal

* Companies declined to comment on Valor report

SAO PAULO, Jan 29 (Reuters) - Brazilian state development bank BNDES could deploy up to 4 billion reais ($2 billion) to help bankroll the potential purchase of ThyssenKrupp AG's Steel Americas unit by local group Cia Siderúrgica Nacional SA, Valor Econômico reported on Tuesday, citing people with direct knowledge of the situation.

It was not clear from the report whether BNDES would extend a loan to CSN, as Cia Siderúrgica is known; pump capital into the steelmaker, or help create a new company that would absorb Thyssen's assets in Brazil and the United States. Press officials for BNDES and CSN declined to comment on the report.

The government is likely to welcome the purchase, which could be concluded by the end of March, as a way to keep Thyssen's assets in Brazilian hands, Valor said. Thyssen currently owns 73 percent of Cia Siderúrgica do Atlántico's Steel Americas' local unit.

The situation is the latest example of a trend started under former President Luiz Inacio Lula da Silva, who helped engineer the creation of conglomerates made up mostly of local companies in sectors deemed as strategic, such as food processing, mining, oil and telecommunications.

President Dilma Rousseff, Lula's political protégé and his successor, has reinforced that trend by granting Brazilian companies generous tax cuts and access to lending through state banks. The involvement of BNDES in the deal would include the creation of a company that would absorb CSN's steel unit and incorporate Thyssen's CSA mill as another asset, Valor noted.

BNDES's investment holding company, BNDESPar, could own a 30 percent stake in the new company, with CSN controlling at least 60 percent. Vale SA, which currently owns the remaining 27 percent of CSA, could end up with a 10 percent stake, according to the Valor article.

Citing a source with direct knowledge of the situation, Reuters reported on Jan. 18 that BNDES was looking for alternatives to help CSN fund the purchase of Steel Americas. CSN is offering $3.8 billion for Thyssen's slab processing plant in Alabama and its 73 percent stake in CSA.

Shares of ThyssenKrupp were up 1.9 percent, the top gainer on Germany's Dax index of leading shares, as traders pointed to the report.

ThyssenKrupp declined to comment.