Tenaris Faces Indemnification Obligation in Usiminas Deal, Brazilian Court Rules

Deal News | Dec 06, 2024 | Globenewswire

The Brazilian Superior Court of Justice (SCJ) has confirmed that Tenaris S.A., through its subsidiary Confab and alongside Ternium's subsidiaries under the T/T Group, is obligated to pay an indemnification to Companhia Siderrgica Nacional (CSN) regarding its 2012 acquisition of an interest in Usiminas. The motion filed by Tenaris to seek a reversal of an earlier court decision was dismissed. However, the court did modify the monetary adjustment mechanism and capped attorney fees, potentially lowering the total amount Tenaris might have to pay, now estimated at around BRL548 million (approximately $90 million). Tenaris maintains that the claims by CSN are unsupported, and plans to continue contesting the decision with further legal appeals and motions. Despite the court ruling, Tenaris insists that the T/T Group did not need to pay indemnification or launch a tender offer during the Usiminas stake acquisition. This situation continues to evolve with inherent market risks, including uncertainties in oil and gas prices affecting industry investment strategies.

Sectors

Steel Manufacturing
Energy
Legal Services

Geography

Brazil – The legal proceedings related to the indemnification obligation for the Usiminas acquisition are taking place within the Brazilian judicial system.
Luxembourg – Tenaris S.A. is headquartered in Luxembourg, indicating its operational base and strategic oversight locale.

Industry

Steel Manufacturing – Tenaris and Usiminas operate within the steel manufacturing sector, focusing on the production and delivery of steel products essential for various industries, including energy.
Energy – Tenaris is a leading supplier of steel tubes and related services for the energy sector, highlighting its involvement in energy industry supply chains.
Legal Services – The legal proceedings and appeals described in the article relate directly to legal services and dispute resolution within corporate transactions.

Financials

BRL548 million ($90 million) – Revised estimated indemnification amount payable by the T/T Group to CSN, as decided by the Brazilian court.

Participants

Name	Role	Type	Description
Tenaris S.A.	Acquirer	Company	A multinational corporation and major supplier of steel tubes and services in the global energy industry.
Confab	Subsidiary	Company	A subsidiary of Tenaris involved in the acquisition of a stake in Usiminas.
Ternium Investments	Subsidiary	Company	A subsidiary of Ternium, part of the T/T Group involved in the Usiminas acquisition.
Ternium Argentina	Subsidiary	Company	Another subsidiary of Ternium, included in the T/T Group in the Usiminas transaction.
Companhia Siderrgica Nacional (CSN)	Claimant	Company	CSN has filed claims against Tenaris regarding the alleged obligations of the Usiminas acquisition.