Brazil's CSN buys assets from Alfonso Gallardo

RIO DE JANEIRO (MarketWatch) -- Brazilian steelmaker Companhia Siderurgica Nacional SA (SID, CSNA3.BR), or CSN, said it agreed to acquire cement producer Cementos Balboa SA and four long steel producers in Spain and Germany from Spain's Grupo Alfonso Gallardo SLU for EUR543 million.

CSN and Alfonso Gallardo first announced they were in talks on the acquisition in December.

CSN will also take on debts worth about EUR403 million as part of the transaction, CSN said in a statement posted on its website.

The acquisition forms part of CSN's strategy to increase its cement and long products business, at the same time enhancing its international presence, CSN said in the statement.

The company recently moved into cement production in Brazil, where it will start up a long products plant in Volta Redonda, Rio de Janeiro state in the final quarter of 2012, CSN directors said on a conference call earlier this month.

CSN is one of Brazil's leading producers of flat steel, which is used in construction, home appliances and carmaking. It's moving into long products, which are more widely used in construction, due to the potential for market growth, the CSN directors said. The cement market is closely linked to the long products market, they said.

Cementos Balboa, located in Extremadura, has production capacity for 1.4 million metric tons a year of cement and 1.1 million tons a year of clinker, a base material for portland cement, CSN said. Balboa also has its own limestone and slate mines near the plant site, CSN said.

Corrugados Azpeitia SL and Corrugados Lasao SLU, two of the four steel plants to be acquired, are both located in Spain's Basque country.

Azpeitia has the capacity to produce 1.1 million tons a year of rebars, the steel bars used in reinforced concrete, while Lasao can produce 200,000 tons a year of soldered products for construction, CSN said.

The Alfonso Gallardo assets to be acquired in Germany are long products producer Stahlwerk Thuringen GmbH, which has capacity to produce 1.1 million tons a year of steel profiles in Unterwellenborn, and Gallardo Sections, a steel products distributor, CSN said.

The acquisitions are subject to approval by anti-trust authorities, CSN said