CSN Gives Huaxin 10 Days of Exclusivity to Negotiate Sale of Cement Unit Valued at 12.7 Billion Reais

Key Facts

Brazilian steelmaker Companhia Siderúrgica Nacional has granted building materials company Huaxin 10 days of exclusivity to negotiate final documents for the sale of its cement unit, in a deal valuing the business at 12.7 billion Brazilian reais. CSN said, according to Exame magazine, that Huaxin submitted the most favorable offer in a competitive process that began in March. The agreement allows the parties to complete negotiations on the contracts, but does not mean the sale has been completed or ownership of the unit has transferred to the buyer. The companies intend to sign the contracts “within days,” according to the report. The potential deal comes as the parent company works to reduce its debt and restructure its capital, while the amount of cash it will receive remains unresolved.

The announced figure is an enterprise value, not necessarily the cash amount that will enter the parent company’s coffers. Exame said the valuation includes CSN Cimentos’ own debt, so net proceeds depend on the transaction’s final terms. Those terms have not yet been announced, making the distinction between the unit’s valuation and actual proceeds important in assessing the sale’s impact on the company’s financial position. The proposed deal value shows the scale of the asset under negotiation, but does not by itself determine how much could be directed toward reducing group debt. At this stage, the exclusivity agreement does not settle the final amount that will go to the parent company.

CSN ended the second quarter of 2026 with net debt of 42.1 billion Brazilian reais and leverage of 3.5 times net debt to EBITDA, according to Exame. As part of efforts to manage that burden, the company was also negotiating an extension of the maturity of bonds worth 1.3 billion dollars due in 2028. This financial backdrop makes the potential deal significant for the resources it could provide the company, but the amount of those resources remains tied to net sale proceeds. The report underscores that the enterprise value includes the cement unit’s debt, so the announced valuation cannot be treated as net cash available to the parent company. The outcome of negotiations on the final documents remains crucial to determining the transaction’s financial impact.

CSN Cimentos has annual production capacity of about 16.3 million tons of cement, according to the report, making it a large-scale operating asset in the Brazilian market. If the sale is completed, Huaxin will gain its first cement plant in Brazil, Exame said. Huaxin’s reported production capacity was about 126 million tons a year in mid-2025, placing the potential deal within an international expansion by a company with a large production base. Huaxin entered Brazil at the end of 2024 by buying the Embu quarry for 186 million dollars. It also agreed in August 2026 to buy a controlling stake in Holcim Philippines, another step in its expansion beyond its home market.

The sale process drew competition from a consortium comprising Votorantim Cimentos and Italy’s Cementir, which was considered the frontrunner in August and submitted an offer close to 11 billion Brazilian reais, according to Exame. But Cementir said in September that the joint proposal had expired without being accepted. On October 20, CSN denied that it was considering an initial public offering of the cement unit as an alternative to a sale, saying the process was in its final stage. CSN later selected Huaxin’s offer as the most favorable in the competitive process that began in March. This sequence places the current exclusivity agreement at the end of a negotiation process that included alternative bids, while completion of the sale remains contingent on signing the final documents.

The next step is signing the contracts and final documents, on which completion of the deal still depends, Exame said, with signing expected in the days following the announcement of exclusivity. The exclusivity period itself runs for 10 days, setting a short timeframe for the parties to complete negotiations. Once this step is complete, the final terms determining the amount that actually enters the parent company’s coffers will become clear. CSN is scheduled to announce its third-quarter results on November 12, 2026, after the exclusivity agreement was announced. The quarterly results will provide a view of the company’s financial figures following these developments, while the sale remains a potential transaction until the final documents are signed.