Local brokerage SLW analyst Mr Pedro Galdi told BNamericas that Brazilian steelmaker CSN's move to increase its stake in compatriot rival Usiminas is not necessarily an attempt to become part of the latter's controlling block.

CSN raised its stake in Usiminas to 20.14% of preferred and 11.66% common shares, according to a filing sent by the former to securities regulator CVM late on November 18th 2011.

Mr Galdi said that "I believe CSN is only seeking to make an investment with these acquisitions."

CSN has been boosting its stake in its rival throughout the year. Previously, CSN held 15.15% of Usiminas' preferred shares and 11.29% of its common shares.

The filing said that "CSN continues to evaluate strategic alternatives regarding its investment in Usiminas."

On September 7th 2011, paper O Estado de S Paulo reported that CSN had made an offer to purchase a 26% stake in Usiminas by acquiring the combined shares of conglomerates Camargo Corrêa and Votorantim, both of whom form part of Usiminas' controlling block, together with Japan's Nippon Steel.

Last week, the Luxembourg based Ternium steel group confirmed that it is in talks with Usiminas' control group regarding a potential acquisition of a minority stake in the latter.

According to press reports, Ternium is allegedly offering to pay BRL 40 per share to Camargo Corrêa and Votorantim to acquire their combined 26% stake in the steelmaker.

Mr Galdi said that "Usiminas is clearly heading towards a change in shareholders but I doubt Ternium will enter. It's strange that Usiminas just sold its participation in Ternium and now that company is trying to become a shareholder."

In February 2011, Usiminas sold its 14.25% stake in Ternium in a transaction totaling USD 1.03 billion.

(Sourced from www.bnamericas.com)