CADE Grants CSN Necessary Approval for Acquisition of Metalgráfica Iguaçu to Boost Metal Packaging Production

The Approval That CSN Received From CADE For The Acquisition Of Metalgráfica Iguaçu Is What The Company Needed For The Purchase Of The Company, But It Will Have To Transfer Part Of Its Shares As A Way To Balance The Business And Boost Packaging Production

The Administrative Council for Economic Defense (CADE) granted approval for Companhia Siderúrgica Nacional (CSN) this past Monday (04/25) for the acquisition and incorporation of Metalgráfica Iguaçu, a manufacturer of metal packaging. In addition, CSN will have to transfer part of its shares to the company’s shareholders, as CADE seeks to expand Metalgráfica’s production and bring balance to the transaction.

CSN Successfully Acquires And Incorporates Metalgráfica Iguaçu After Approval Granted By CADE

In a somewhat risky but beneficial strategy regarding long-term production, CADE granted CSN the necessary approval for the acquisition and incorporation of Metalgráfica Iguaçu during this past week. However, CSN will also have to give the current shareholders of Iguaçu a percentage of shares that will be approved in an extraordinary general assembly of the companies to equalize the transaction approved by the council this Monday.

CSN is one of the largest players in the industrial production and steelmaking segment in Brazil, with ventures ranging from iron ore extraction to the production and commercialization of a diverse range of steel products, through its own business areas and its subsidiaries. Meanwhile, Metalgráfica Iguaçu operates in the manufacture of metal packaging and is primarily controlled by Merisa Engenharia e Planejamento, being one of the major references within this segment in Brazil.

Thus, the acquisition of Iguaçu by CSN is a way to ensure an expansion in the production of materials, in addition to other major pillars of the transaction, such as keeping a manufacturer in the metal packaging market and, consequently, the demand for metal sheets; acquiring more modern and productive metal packaging production lines; and ensuring the resumption and growth of Iguaçu’s productive activity. Thus, CADE was able to verify these objectives as beneficial for both parties in the transaction for the approval of the approval granted this week for the acquisition and incorporation of the company. 

The Administrative Council for Economic Defense Performed Extensive Analyses On The Benefits Of The Acquisition Of Iguaçu By CSN Before Granting Approval For The Incorporation

In addition to being important for the development of a series of investments in the production of metal packaging and keeping the segment vibrant in Brazil, the acquisition of the company by CSN is also considered by the shareholders of Iguaçu as essential for cleaning up accounts and avoiding indebtedness. Thus, the metallurgical company secured a significant defense point for the approval of the necessary approval for the transaction between the companies.

But this was not the only reason that led to the approval, and CADE’s General Superintendence identified factors that create competitive pressures in such a way as to make it unlikely for the companies involved to exercise market power. Therefore, it would become almost impossible to approve the approval for the purchase of the company with restrictions, which led to the rapid release by CADE for CSN during this past week.

Finally, if there is no interruption in the process from either party over a period of 15 days, the decisions of the General Superintendence will have a definitive character, and the operations will be definitively approved by the antitrust agency, thus ensuring the completion of the incorporation process of Iguaçu by CSN.