Brazil Stock Guide – Japan’s Nippon Steel Corporation (TSE: 5401) said it will transfer its entire stake in Usiminas (B3: USIM5) to Ternium S.A. (NYSE: TX), marking the end of a six-decade partnership that shaped Brazil’s steel industry. The announcement was followed by confirmation from Ternium, which said it will also acquire Mitsubishi Corporation’s stake, in a deal valued at approximately US$ 315.2 million.
The transaction involves 153.1 million common shares priced at US$ 2.06 per share, through Ternium’s Luxembourg-based subsidiary Ternium Investments S.à r.l. Once completed, Ternium’s stake in Usiminas’ controlling group will rise from 51.5% to 83.1%. Including holdings by Ternium Argentina and Confab (a Tenaris subsidiary), the extended Ternium group will control 92.9% of the voting bloc that governs Usiminas. The remaining 7.1% will stay with Previdência Usiminas, the company’s employee pension fund. Overall, the Ternium group will hold 71% of Usiminas’ total common shares, consolidating Ternium as the company’s sole industrial controller.
The decision, disclosed in the japanese company’s semiannual results on Wednesday (Nov. 5), comes as Usiminas posted a record net loss of R$ 3.503 billion in 3Q25, reversing a profit of R$ 185 million a year earlier.
Stake and valuation
Nippon Steel previously held about 30% of Usiminas’ voting shares, or roughly 5% of the company’s total capital. Although the specific amount for the Japanese group’s stake was not disclosed, Ternium’s statement indicates a combined transaction worth around R$ 1.7 billion (US$ 315 million), reinforcing its position as the sole industrial controller of Usiminas.
Strategic Shift Toward Key Markets
In its own financial report, Nippon Steel said the decision to exit Brazil reflects a strategic reallocation of management resources toward higher-growth markets.
“We have decided to transfer all shares we hold in Usiminas to Ternium, in order to focus management resources on key regions — the United States, India, and Thailand,” the company said.
The group is now focusing on integrating U.S. Steel, acquired earlier this year, and expanding AM/NS India, aiming to reach 100 million tons of annual crude-steel capacity.
Losses and Restructuring Costs
Nippon Steel booked an impairment of ¥21 billion (about R$ 720 million) related to the Usiminas stake, as part of ¥260 billion (R$ 8.9 billion) in extraordinary losses tied to portfolio restructuring — including the sale of the AM/NS Calvert plant in the United States.
Despite the one-off hit, the company reaffirmed its underlying business profit forecast of ¥680 billion for fiscal 2025 and reported a net loss of ¥113 billion for the half-year, citing temporary effects from the integration of U.S. Steel.
Crisis in Ipatinga and a Struggling Industry
The exit of Nippon Steel comes at a moment of deep stress for Brazil’s steel industry. Imports — mainly from China — now cover nearly a third of domestic demand, often priced below production costs. Local producers, led by Usiminas and Gerdau, have turned their quarterly earnings calls into public campaigns for trade protection, warning that without state action Brazil risks losing its industrial base.
In a recent Behind the Lines column, Usiminas CEO Marcelo Chara praised the government’s move to extend antidumping duties on heavy plate from China and South Korea and noted that new investigations into galvanised and pre-painted steel are already advancing.
Vice president Miguel Homes Camejo said final rulings on cold-rolled and coated steel cases are expected by early 2026. At Gerdau, CEO Gustavo Werneck dropped diplomatic caution: “We’ve reached the limit of what efficiency alone can do,” he said, calling for “industrial sovereignty” and direct government support.
For Usiminas, the combination of dumping pressure, weak demand, and high interest rates culminated in the worst financial result in its history, accelerating the exit of its Japanese partner and consolidating Ternium’s control of the company.
Ternium’s Momentum
Ternium highlighted its strong financial position to support the acquisition, with a current ratio of 2.46 and net assets exceeding short-term obligations. Its shares have traded near a 52-week high of US$ 38.15, delivering a 27.5% price return over the past six months, according to InvestingPro data. The company said it will finance the purchase with available cash, under the 2023 shareholders’ agreement, pending Brazilian antitrust approval.
End of a Six-Decade Partnership
A Legacy Forged in Steel
The Nippon Steel exit also closes a chapter that began nearly seven decades ago, with the founding of Usiminas in 1956 and, one year later, the signing of the Lanari–Horikoshi Agreement in 1957. The pact — named after Brazilian engineer Amaro Lanari Júnior and Japanese envoy Teizo Horikoshi — formalized Japan’s participation in the company’s construction, marking the nation’s first major overseas investment after World War II and a cornerstone of President Juscelino Kubitschek’s industrialization plan.
The project united capital from Brazil’s BNDE (now BNDES) and Japan’s Yawata Iron and Steel Company — the predecessor to Nippon Steel — to build one of Latin America’s largest integrated steel complexes. It was a symbolic alliance of technology and ambition: Brazilian engineers trained in Japan in the late 1950s — nicknamed “the Seven Samurais” — returned with industrial expertise and a culture of precision and discipline that continues to define Usiminas’ identity today.
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