Latin American steel company Ternium S.A. (Ternium) and Mexican steelmaker Grupo Imsa S.A.B. de C.V. (Imsa) have announced that Ternium will acquire Imsa for approximately US$1.7 billion.
Under the terms of the agreement, Ternium will make a tender offer for all issued and outstanding shares of Imsa for US$6.40 per share. Imsa's majority shareholders, who own approximately 90.4 percent of the company's shares, will have their shares redeemed in cash at the same price.
Ternium says it has set up bank commitments in order to finance the transaction, primarily through debt.
Ternium chairman Paolo Rocca said in the company's press release, "Upon the completion of this transaction, Ternium will strengthen its position in North America, where more than 60 percent of its revenues will be concentrated. The integration of Imsa will expand Ternium's industrial capabilities in value added steel products in Mexico and the US."
The transaction is expected to close in the third quarter of 2007, and is subject to Mexican and US antitrust government clearances as well as other customary conditions.