Cementing a deal

14 January 2010 By Fiona Maharg-Bravo

The Brazilian steel company’s hostile bid for Cimpor has flushed out a rival Brazilian suitor. Camargo Correa has put forward a vague plan to acquire a minority stake in Portugal’s largest cement company. But a friendly plan with possible synergies could force CSN to offer more.

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Grupo Camargo Correa, a leading Brazilian construction conglomerate, has offered to merge its cement unit into Portugal's Cimpor in return for Cimpor shares. In addition, Camargo has offered to buy between 15 percent and 25 percent of Cimpor, Portugal's largest cement producer. Its total stake would remain below 50 percent.

In addition, Camargo Correa offered to pay 350 million euros ($497 million), which would be paid out as a oneoff dividend. Cimpor's current market capitalisation is 4.3 billion euros and it has net debt of 1.8 billion euros.

Cimpor said it would study the Correa proposal carefully.

On Jan. 8, Cimpor rejected a takeover offer from CSN. The Brazilian steelmaker offered 5.75 euros a share, a premium of 5 percent over the preoffer share price.

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