Ternium may bid for ThyssenKrupp's Brazilian assets-report

SAO PAULO, March 15 Fri Mar 15, 2013 8:14am EDT

SAO PAULO, March 15 (Reuters) - Italian-Argentine steelmaker Ternium SA may make a firm bid for ThyssenKrupp AG's money-losing mill in Brazil, Valor Econômico newspaper reported on Friday, citing an unnamed source.

The proposal by Ternium, one of the two controlling shareholders of Brazilian steel producer Usinas Siderúrgicas de Minas Gerais SA, is not very "attractive," the source told the newspaper, and could lead Germany's ThyssenKrupp to put off the process for a few months.

The newspaper did not report how much Ternium offered for CSA, as Thyssen's mill in Brazil is known. Valor also said a consortium led by ArcelorMittal SA and Japan's Nippon Steel & Sumitomo Metal Corp made a firm offer for Thyssen's mill compound in Alabama. Reuters reported the offer in February.

The Valor report highlighted the challenges facing the German company as it seeks to shed money-losing assets like CSA to restore investor confidence.

ThyssenKrupp took a big writedown on the value of the Steel Americas unit last year. The company sought to carve out new markets with the construction of two mills in Brazil and the United States during the middle of the last decade but the projects were hit by cost overruns, poor project management and weaker-than-expected demand.

Calls to a Ternium spokesman in Buenos Aires were not immediately answered. Efforts to reach executives at ArcelorMittal, Nippon Steel and ThyssenKrupp were unsuccessful.

The process might be suspended to allow Brazilian state development bank BNDES and Brazil's Cia Siderúrgica Nacional SA to iron out terms of a joint bid for CSA and the Alabama mill, Valor reported, citing several sources.

It was not clear how BNDES could extend a credit facility to CSN, as Cia Siderúrgica is known, or participate in the deal. For months, there has been speculation the Brazilian government would bless the purchase as a way to keep Thyssen's assets in Brazilian hands.

CSN and BNDES declined to comment.

Thyssen currently owns 73 percent of CSA. According to the newspaper, ThyssenKrupp wants to conclude the sale of Steel Americas, which includes both CSA and the Alabama compound, before the end of September.