China’s Huaxin Building Materials Group has signed an agreement to buy 99.99% of Brazil’s CSN Cimentos for approximately $1.64 billion, advancing an overseas expansion strategy as its domestic cement business faces pressure.
The deal, signed November 7 and disclosed in a November 8 Hong Kong exchange filing, would give Huaxin control of Brazil’s second-largest cement producer. It still requires regulatory clearances and has not closed.
Huaxin put the expected payment for the shares at 9.0337 billion Brazilian reais, equivalent to about $1.642 billion, subject to adjustments for debt and working capital at closing. That is distinct from the transaction’s agreed enterprise value of 12.7 billion reais, or approximately $2.3085 billion.
CSN Cimentos operates seven integrated cement plants and six grinding plants, with annual cement production capacity of 17 million tonnes. Its products mainly serve northeastern and southeastern Brazil, according to the filing. The seller is Companhia Siderúrgica Nacional, the Brazilian group with steel, mining, cement, logistics and energy businesses.
The signed purchase agreement moves the transaction beyond the exclusive agreement disclosed October 30. Huaxin said it expects the conditions for closing to be satisfied in the first quarter of 2027, although it warned that the acquisition may not proceed.
Required clearances include approval from Brazil’s competition authority, CADE, and electricity regulator ANEEL, alongside Chinese overseas-investment filings and foreign-exchange registration. Huaxin said the purchase would be paid in cash in Brazilian reais, using internal resources, bank loans, bond issuance and other external financing.
The company described the transaction as a way to expand internationally and offset weakness in its domestic market. It said the acquisition would mark its first entry, and the first by any Chinese cement producer, into Brazil’s cement market. If completed, CSN Cimentos would become a controlled subsidiary and its financial results would be included in Huaxin’s accounts.
JBizNews Desk | Wuhan
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