Antitrust watchdog’s decision forces company to sell securities, but did not set deadline
Usiminas: CSN started building a position in the competitor in 2011 and now holds 15% of common shares — Foto: Divulgação
CSN needs to reduce its stake in Usiminas to up to 5%, but has no deadline to conclude the sale. This was the decision of the Administrative Council for Economic Defense (CADE) on Wednesday. There was the possibility of a 17% stake being allowed.
The solution adopted follows a 2014 decision. At the time, CADE’s court vetoed CSN’s nearly 17% stake in Usiminas, acquired in 2010. The decision required CSN to sell part of the shares it held in the competitor, which Benjamin Steinbruch’s company was unable to do in five years.
Even after three extra years, the sale was not completed either, and now CADE’s General Superintendence no longer sees a problem in the percentage that had been vetoed by the court of the antitrust agency. So the case went back to the court and an intermediate solution was adopted.
The assessment of people close to the negotiation is that the decision was positive for Usiminas compared to the possibility of a total reversal of the 2014 decision. However, it is not ruled out the possibility of litigation, according to a source, to restrict the purchase of shares by CSN.
The possibility of reversing the 2014 decision emerged last week, when CADE’s General Superintendence issued an opinion changing the regulator’s previous decision and allowing CSN to acquire more than 5% of Usiminas shares, provided it does not exercise voting rights.
If this new decision was adopted, CSN could keep nearly 15% of the common shares, which would make it CSN’s largest single stockholder outside the controlling group.
Usiminas asked the regulator on Wednesday to comply with its 2014 decision that limits CSN’s stake in the company and define an independent third party to try and carry out the sale of the shares. The superintendence’s order ended up not prevailing in the session.
CADE’s head Alexandre Cordeiro said that this is not a deal review. His vote maintains the obligation to sell the shares, but changes the fixed term of the sale to an indefinite term. Usiminas declined to comment. CSN did not reply to a request for comment.
*By Beatriz Olivon
Source: Valor International