# China’s Huaxin Bets on Brazil With $2.3 Billion CSN Cement Deal, Plans to Cut Financing Costs

*The Chinese group values CSN Cimentos at R$12.7 billion ($2.31 billion), with an estimated equity purchase price of R$9 billion ($1.64 billion).*

- Published: 2026-11-08
- Section: Insights
- Tags: CSN, CSN Cimentos, Huaxin
- URL: https://brazilstockguide.com/br/insights-br/chinas-huaxin-bets-on-brazil-with-2-3-billion-csn-cement-deal-plans-to-cut-financing-costs/

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**By Brazil Stock Guide —** China’s Huaxin Building Materials Group plans to turn CSN Cimentos into a platform for expansion across South America, using the Brazilian cement producer’s manufacturing capacity, limestone reserves and established market position to strengthen its international business and reduce its exposure to slowing construction demand at home.

In a regulatory filing, Huaxin said it would pay approximately R$9.03 billion ($1.64 billion) for a 99.99% stake in CSN Cimentos, a subsidiary of Brazilian steelmaker Companhia Siderúrgica Nacional (B3: CSNA3; NYSE: SID). The transaction values the business at R$12.7 billion ($2.31 billion), including net debt, with the final purchase price subject to customary closing adjustments. The agreement was signed on November 7.

The acquisition marks a significant step in Huaxin’s international expansion strategy. According to the company, it will be the first Chinese cement manufacturer to enter Brazil’s cement production market, further diversifying its exposure to emerging economies and reducing its reliance on China’s domestic construction sector. Huaxin already operates in Brazil’s aggregates business.

Huaxin describes CSN Cimentos as Brazil’s second-largest cement producer, with seven integrated cement plants, six grinding facilities and annual production capacity of 17 million metric tons. The Chinese group estimates that the business accounts for approximately 21% of the Brazilian market and holds limestone reserves of about 2.2 billion metric tons, with operations concentrated primarily in the country’s Northeast and Southeast regions.

#### Cutting Financing Costs and Improving Profitability

One of Huaxin’s main priorities following the acquisition will be to improve CSN Cimentos’ profitability by lowering financing expenses and increasing operational efficiency.

The Chinese company said financial pressures at CSN, the Brazilian industrial group controlled by businessman Benjamin Steinbruch, had pushed up borrowing costs at its cement subsidiary, weighing on net earnings despite solid operating performance.

Following completion of the deal, Huaxin plans to gradually replace high-interest bank loans with lower-cost financing arrangements. The strategy will also involve introducing manufacturing technologies, operational processes and management practices developed across the group’s international operations.

The financial figures disclosed by the buyer show a business with substantial operating earnings but profitability constrained by financing costs.

In 2025, CSN Cimentos generated revenue of $891.6 million, earnings before interest, taxes, depreciation and amortization (EBITDA) of $234.5 million and net income of $24.1 million, representing an EBITDA margin of 26.3%.

Revenue reached $510.3 million in the first half of 2026, while EBITDA totaled $159 million, equivalent to a 31.1% margin. Despite the stronger operating margin compared with full-year 2025, the company reported a net loss of $11.8 million during the six-month period.

Huaxin believes that reducing financing expenses, improving capacity utilization and increasing industrial efficiency could materially strengthen the acquired company’s profitability.

The group also sees growth opportunities in Brazil’s cement market, where annual demand has remained above 62 million metric tons since 2022. Brazil is Latin America’s largest economy and one of the region’s most important markets for construction materials.

#### Valuation and Acquisition Financing

The estimated R$9.03 billion equity purchase price reflects a reference net debt position of R$3.67 billion as of June 2026.

Payment will be made in Brazilian reais in a single installment at closing, financed through a combination of Huaxin’s own resources and external funding, potentially including bank loans and debt issuance.

Huaxin said the proposed price represents a premium of approximately 34.4% over CSN Cimentos’ book value as of December 2025.

The company also benchmarked the acquisition against previous transactions in Brazil’s cement industry and found that the enterprise value-to-EBITDA multiple was below the 9.4-times median observed in the selected comparable deals.

From Huaxin’s perspective, the valuation reflects CSN Cimentos’ competitive position, the location and quality of its production facilities, its extensive limestone reserves and opportunities for further expansion.

The acquisition is also expected to increase Huaxin’s global production capacity and strengthen its resilience to fluctuations in China’s construction market, where demand has been under pressure from a prolonged property-sector downturn.

Completion remains subject to approval by Brazil’s antitrust regulator, the Administrative Council for Economic Defense (Cade), prior consent from the Brazilian Electricity Regulatory Agency (Aneel), and applicable Chinese regulatory approvals.

The agreement provides for a R$750 million termination penalty if the transaction is not completed by November 8, 2027, due to a breach attributable to either party.

Huaxin acknowledged risks related to exchange-rate fluctuations, Brazilian market conditions and regulatory approvals. Nevertheless, the company views the acquisition as an opportunity to expand its international footprint and apply its experience integrating acquired businesses.

For Huaxin, the transaction offers immediate access to one of Latin America’s largest cement production platforms, with the potential to improve profitability through refinancing, operational efficiencies and integration into the Chinese group’s global network.

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Source: Brazil Stock Guide, https://brazilstockguide.com/br/insights-br/chinas-huaxin-bets-on-brazil-with-2-3-billion-csn-cement-deal-plans-to-cut-financing-costs/