(Updates with context, details)
SAO PAULO, Sept 9 (Reuters) - Brazilian steelmaker Companhia Siderurgica Nacional’s (CSN) cement unit is close to acquiring LafargeHolcim Ltd’s assets in the country, two people with knowledge of the matter told Reuters on Thursday.
Other bidders have been told that LafargeHolcim, the world’s largest cement maker, has picked CSN’s bid, the sources said on condition of anonymity as the talks are private.
LafargeHolcim is selling the assets to reduce leverage and it analyzed proposals from CSN and local rival Mizu that aimed to acquire its full business in Brazil, the people said.
Brazil’s largest cement makers, Votorantim Cimentos SA and Intercement Brasil SA, were only interested in parts of the businesses due to antitrust restrictions, the sources added.
They did not provide the deal value, but sources have previously told Reuters that LafargeHolcim was expecting proceeds of $1 billion to $1.5 billion.
CSN and LafargeHolcim did not immediately reply to requests for comment sent by Reuters outside business hours.
CSN has already secured financing from a syndicate of banks led by BNP Paribas, one of the sources added.
Brazilian newspaper Valor Economico also reported earlier in the day that CSN’s bid had been chosen.
CSN EYES M&A
CSN’s bid for LafargeHolcim’s assets are in line with its interest to acquire cement firms in a fragmented Brazil market.
Its cement unit in June bought a smaller rival, Elizabeth Cimentos, for $218 million. Its planned IPO was shelved in July due to market conditions, but CSN still expects to list and raise money to fund deals.
Cement sales have grown sharply in Brazil this year versus 2020, on higher demand for real estate. According to industry group SNIC, total sales in the first eight months of the year rose 11.4% from a year earlier to 43.4 million tonnes.
CSN, which posted a $1 billion profit for the second quarter, has sharply deleveraged over the past year after listing its mining business CSN Mineração SA.
In a nod to its deleveraging and improved cashflow, rating agencies Fitch, Standard & Poors and Moody’s recently upgraded CSN. S&P too upgraded it two notches to BB from B+.
Fitch upgraded CSN to BB from BB- late last month citing the company’s efforts to “strengthen its capital structure including debt repayment, refinancing and asset sales” and the effect of high iron ore prices in its earnings. (Reporting by Tatiana Bautzer and Carolina Mandl in Sao Paulo; Editing by Christopher Cushing and Himani Sarkar)