December 3, 2012 / 1:25 PM / 5 years ago

STXNEWS LATAM-CSN bid for Thyssen's Brazil unit 'negative' for stock-BofA

Cia Siderúrgica Nacional SA’s potential purchase of the Brazilian slab-making unit of ThyssenKrupp AG would be negative for shares, according to a note by Bank of America Merrill Lynch analysts on Monday. Bloomberg News reported on Friday that CSN, as Cia Siderúrgica is known, could pay $3 billion to buy CSA, as Thyssen’s unit is known.

According to the analysts, led by Thiago Lofiego, it is hard to “find value” in the purchase; the deal could leave CSN, as Brazil’s No. 2 producer of flat steel products is known, more indebted than now. Lofiego and his team added that Thyssen’s CSA is a loss-making mill that requires massive investments.

Currently, Bank of America Merrill Lynch has an “underperform” recommendation with a 10.50 reais price target for the next 12 months.

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