Brazilian Steel Giant CSN Wins $920M Court Battle Over Disputed Takeover

A major victory for Brazil’s CSN steel company has shaken the Latin American steel industry. Brazil’s highest court ruled that rival Ternium must pay CSN nearly $920 million over a controversial 2011 takeover deal.

The dispute centers on Ternium’s purchase of a 27.7% stake in Usiminas, Brazil’s largest steel producer. CSN, which owned 12.9% of Usiminas, claimed Ternium broke shareholder rules by not extending the same purchase offer to minority owners.

The money at stake explains why CSN pursued this case for 12 years. Ternium paid an 83% premium above the market price when buying Usiminas shares at $36 each from major shareholders.

This premium should have been offered to all shareholders under Brazilian market rules. CSN’s persistence paid off despite early setbacks. Brazil’s market regulator and lower courts initially sided with Ternium.

The Superior Court reversed these decisions, ruling that Ternium’s entry changed Usiminas’s control structure enough to trigger minority shareholder rights.

The market responded immediately to this ruling. CSN’s stock jumped 5.64% as investors recognized the potential billion-dollar payout.

This compensation could significantly strengthen CSN’s financial position in Brazil’s competitive steel market. Ternium plans to appeal, arguing the ruling contradicts standard market practices.

Their challenge highlights an ongoing debate about protecting minority shareholders during major corporate takeovers in emerging markets. This case matters because it sets new expectations for corporate deals in Brazil.

Companies now face stricter scrutiny when acquiring controlling stakes. The ruling shows that even after years, courts may enforce minority shareholder protections with substantial penalties.

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