The Brazilian supreme court (STF) has asked the financial markets authority, CVM, for information about the current dispute between the steel and iron ore producer, CSN, and the Italian and Argentine steel producer, Ternium.
The dispute refers to the acquisition by Ternium of a capital stake of the Brazilian steel producer, Usiminas, in 2011.
At that time, CSN was a shareholder of Ternium, and claimed that the acquisition by Ternium included the control of Usiminas.
According to the Brazilian legislation, if 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.
During these 13 years, CSN lost the dispute next to the financial market authority, CVM, and to different levels of civil courts, until the dispute reached the upper court STJ this year.
Last June, the five ministers of STJ declared CSN the winner of the dispute by a 3X2 score.
Then, Ternium took the dispute to STF in an unconstitutionality action supported by the Brazilian foreign trade association (AEB), which was accepted by STF minister André Mendonça.
AEB claims that the change of control occurs only when the acquisition refers to 50 percent or more of the voting capital of the company, while the acquisition by Ternium referred to 27.7 percent of the Usiminas capital.
Under the viewpoint of CSN, Ternium assumed the control of Usiminas in a disguised manner.
Mendonça gave AEB ten days to send the information requested.
The value of the dispute is estimated at approximately $1.0 billion, depending on the $/BRL exchange rate.