Ternium Sells Non-Core Assets

Argentina’s Ternium says its subsidiary, IMSA Acero has entered into a stock purchase agreement with BlueScope Steel for the sale of IMSA’s interests in Steelscape, ASC Profiles, Varco Pruden Buildings and Metl-Span. The deal values the assets at $730m on a cash-free and debt-free basis, subject to working capital and other adjustments. BlueScope Steel will also assume approximately $20m in under-funded pension liabilities. Ternium intends to use proceeds to prepay debt. “By selling the assets that are not a strategic fit with our production system, we seek to enhance our focus on our core businesses in the Americas and reaffirm our commitment to create value through a disciplined approach to expansion that is consistent with our regional strategy,” says Ternium CEO Daniel Novegil. The transaction, subject to US antitrust clearance, is expected to close in Q1 2008. Goldman Sachs was exclusive financial advisor to Ternium. Ternium will continue to own Steelscape’s Shreveport plant. It will also will retain its pre-engineered metal buildings and insulated steel panels businesses in Mexico. The assets being sold accounted for annual net sales of approximately $1.2bn in 2006.