Usiminas In J. Mendes Acquisition Talks

Brazil’s Usiminas is negotiating, on an exclusive basis, the acquisition of Mineracao J. Mendes, Somisa Siderurgica Oeste de Minas Ltda, and Global Mineracao, according to rating agencies. The three targets are engaged in iron ore mining and located in the state of Minas Gerais. “We expect Usiminas to maintain a very conservative financial strategy and credit measures for the rating category, despite the acquisitions,” says S&P. “We believe there are risks associated with executing these investments, but the company’s experienced team and positive investment track record mitigate these risks.” According to Moody’s, an acquisition would further improve Usiminas’ business profile by creating a natural hedge for its iron ore costs and make the company virtually self-sufficient in iron ore. Usiminas reported consolidated net revenues of BRL13.6bn in the 12 months ended September 30 2007, says Moody’s.