October 12, 2008

Ternium to accept deal or face takeover – Mr Chavez

It is reported that Mr Hugo Chavez president of Venezuela has suggested that Ternium SA should accept a fair' price for the nationalization of its 60% stake in Sidor immediately or face expropriation because shareholders are demanding excessive compensation for the company's nationalization.

Mr Chavez said that he is prepared to occupy the company's facilities on April 29th 2008 should the company and the government fail to reach an agreement during a final meeting tomorrow. He said “I will sign the expropriation decree and take control immediately of the company. I have no problem doing it.”

Venezuelan government has put t values Ternium's Siderurgica del Orinoco unit, known as Sidor, at USD 800 million.

Ternium bought its stake in Sidor in 1997 for USD 1.5 billion and had asked for between USD 3.2 billion and USD 4.8 billion. Sidor is 60% owned by Ternium, 20% by the Venezuelan government and another 20% by current and ex workers. Ternium SA is controlled by Argentine Italian conglomerate Techint Group. It produces about 85% of the 5 million tonnes of steel produced annually in Venezuela.