Germany's ThyssenKrupp to Sell Brazilian Steel Plant to Ternium

By Eyk Henning

FRANKFURT--German engineering giant ThyssenKrupp AG is in talks with Ternium SA to sell its large steel plant in Brazil, a step that would finish unwinding the German company's unsuccessful investment push in the Americas, according to people familiar with the matter.

The discussions are at an advanced stage and could be concluded by year-end, those people said, adding there is no guarantee a deal will take place. One significant potential stumbling block is the fact that Ternium would likely want to pay less than the plant's current book value of roughly EUR2 billion ($2.17 billion).

Any deal below that value would hit ThyssenKrupp's equity cushion, which is already thin, according to analysts. It was unclear whether other bidders are also eyeing the steel-slab plant, which cost ThyssenKrupp roughly $6.8 billion to build when finished in 2010. In 2013, ThyssenKrupp sold its U.S. steel plant to ArcelorMittal and Nippon Steel & Sumitomo Metal Corp. for $1.55 billion.

ThyssenKrupp said in an emailed statement that the company is seeking to dispose of CSA, adding it was a normal course of business to hold talks with potential buyers.

A Ternium investor-relations official declined to speak with The Wall Street Journal. The company's press office didn't immediately respond to an email.

Ternium is a Luxembourg-based producer of flat and long steel products with a strong presence in Latin America.

Write to Eyk Henning at eyk.henning@wsj.com

(END) Dow Jones Newswires

October 25, 2016 11:15 ET (15:15 GMT)

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