By request from the Brazilian supreme court (STF), the financial markets authority CVM informed, in its opinion, there was no change of the control of Usiminas, back in 2011, when Ternium acquired a capital stake of the steel producer.
In view of CVM, the change of control occurs when the acquisition comprehends a capital stake of 50 percent or more, which was not the case, as Ternium bought a 27.7 percent stake of Usiminas capital.
Under the Brazilian legislation, when the acquisition of a capital stake includes the control of the company, the minority shareholders are entitled to the “tag-along” rights, meaning that the acquisition should be extended to such minority shareholders, at the same price per share paid by the new controller.
In 2011, CSN was a shareholder of Usiminas, and since then it has claimed tag along rights, today estimated at $1.0 billion, under the reasoning that Ternium assumed the control of Usiminas in a disguised manner.
CSN was defeated in different levels of civil courts, until it reached the upper court STJ, which last June approved CSN viewpoint by a 3X2 score.
According to analysts, STF will probably annul the approval by STJ, for the benefit of Ternium.