On September 7, 2017, Ternium S.A. (Luxembourg) and thyssenkrupp AG completed its acquisition (announced on February 21, 2017) of a 100% ownership interest in thyssenkrupp Slab International B.V. (“tkSI”) and its wholly-owned Brazilian subsidiary, CSA Siderúrgica do Atlântico Ltda. (“CSA”). CSA is a steel slab producer with a steelmaking facility located in the state of Rio de Janeiro with an annual production capacity of 5 million tons of high-end steel slabs, a deep-water harbor and a 490 MW combined cycle power plant. 

As part of the transaction, thyssenkrupp assigned to Ternium a 2.0 million tons per year agreement to supply slabs from CSA’s facility in Brazil to thyssenkrupp’s former Calvert re-rolling facility in Alabama, United States.

The acquisition closed after receipt of the requisite antitrust clearances in Brazil, Germany, Turkey and the United States.

The transaction will enhance Ternium’s differentiation and value-added capabilities in the steel production supply chain, by bringing another state-of-the-art facility into its industrial system, along with CSA’s highly-skilled personnel and know-how. Upon integration, Ternium customers are expected to benefit from expanded high-end steel slabs capacity, and will see the results of an enhanced product development and supply chain management effort that will increase high-end steel specialization in Mexico and Argentina. 

 As part of the integration process, CSA changed its corporate name to Ternium Brasil Ltda., and tkSI changed its corporate name to Ternium Staal B.V. 

Purchase price and financing

Ternium disbursed EUR 1.45 billion, on a cash-free, debt-free basis, for the acquisition of both the tkSI shares and the assignment of the slab supply agreement. Prior to closing, CSA repaid in full a EUR300 million loan with BNDES. 

The acquisition was partially financed with the proceeds of a five-year term loan facility in a principal amount of USD1.5 billion entered into on July 19, 2017, with a syndicate of banks led by Citigroup Global Markets Inc., Intesa Sanpaolo S.p.A., JPMorgan Chase Bank, N.A., Natixis, New York Branch (acting as administrative agent), The Bank of Tokyo-Mitsubishi UFJ, Ltd., Bank of America, N.A., BNP Paribas, Credit Agricole Corporate and Investment Bank, and HSBC Bank USA, N.A., as joint bookrunners. The loans will be repaid in eight equal semi-annual installments commencing on the 18th month following disbursement. The facility is governed by New York law and is guaranteed by Ternium Mexico, S.A. de C.V., a wholly-owned subsidiary of Ternium. 

Jurisdictions involved
In connection with the acquisition: Germany, Luxembourg, Netherlands, Brazil and the United States.
In connection with the financing: Luxembourg, Mexico and the United States.

Participating counsel in acquisition transaction
Counsel to Ternium
• International counsel and global coordination: Mitrani Caballero Ojam & Ruiz Moreno
Lead Partner: Diego Parise.
Corporate matters: Juan Ignacio Soma (partner), Guillermo Cornejo Bosch and Agustin Goncalves Borrega (associates)
Labor: Jorge Pico (partner), Esteban Valansi (partner) and Cecilia Brunelli (associate)
Tax: Corina Laudato (counsel)

• In-house counsel: Fernando Duelo van Deusen and Cynthia Graf. 

• Netherlands counsel: Allen & Overy LLP
Corporate matters: Karine Kodde (partner), Danielle du Bois-Buné (senior associate), Cecile Witlox (Associate and Assistant Notary) and Rozemin Wissels (associate)
Tax: Godfried Kinnegim (Partner), Jochem Kim (counsel) and Max van Boxtel (associate)
Antitrust: Marinus Winters (antitrust counsel) and Elise Troll (antitrust associate).

• German antitrust counsel: Allen & Overy LLP, through Rene Galle (counsel) and Kristin Fruhnert (associate) 

• Turkish antitrust counsel: Gedik Eraksoy Avukatlık Ortaklığı (firm associated with Allen & Overy LLP), through Emre Onal (counsel) 

• U.S antitrust counsel: Sullivan & Cromwell LLP, though Steven Holley (partner) and Eric Queen (special counsel) 

• Brazilian corporate counsel: Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados, through Eduardo Damião Gonçalves (partner), Fábio Coelho Studart Montenegro (associate) and Adriano Castello Branco (associate).

• Brazilian antitrust counsel: Barbosa Müssnich & Aragão, through Barbara Rosemberg (partner), Carolina Cury Ricciardi (associate) and Patrícia Avigni (associate).

Counsel to thyssenkrupp
• International counsel and global coordination: Linklaters LLP
Lead Partner: Ralph Wollburg
Corporate matters: Kristina Klaaßen-Kaiser (partner), Christoph van Lier (counsel), Tobias Bünten (associate) and Alexander Jüngst (associate)
Tax: Sebastian Benz (partner)
 Antitrust: Christoph Barth

• In-house counsel: Martin Schlag.

• Netherlands counsel: Linklaters LLP.

•  Brazilian counsel: Lobo de Rizzo Advogados.

Participating counsel in financing transaction
Counsel to Ternium
• International counsel and global coordination: Mitrani Caballero Ojam & Ruiz Moreno, through Diego Parise (lead partner), Mercedes Rodríguez Giavarini (partner) and Natalia Rauchberger (counsel).

•  Luxembourg counsel: Elvinger, Hoss & Prussen, through Toinon Hoss (partner) and Azadeh Djazayeri (counsel).

•    Mexican counsel: Ritch, Mueller, Heather y Nicolau S.C., through Carlos Obregón (partner), Ana Casasus Trejo (associate) and Alejandra de la Mora Mutzenbecher (associate).
Counsel to the lenders

•    New York counsel: Milbank, Tweed, Hadley & McCloy LLP, through Carlos Albarracin (partner), Andrés Osornio (associate) and Gonzalo Guitart (international attorney).

•    Luxembourg counsel: Loyens & Loeff Luxembourg Sàrl, through Frédéric Franckx (partner), Judith Raijmakers (partner), Florian Osman (senior associate), Natalja Taillefer (senior associate), Sabine Schoute (senior associate), and Alvaro Garrido Mesa (associate).

•    Mexican counsel: Mijares, Angoitia, Cortés y Fuentes, S.C., through Manuel Echave Pintado (partner), Horacio de Uriarte (partner) and Luis A. Rutz Vega (associate).