Ternium is feeling hopeful about winning its long-standing legal battle with rival CSN over a 2011 stake purchase in Usiminas.
What does this mean?
This clash began when Ternium acquired a 27.7% stake in Usiminas in 2011. CSN, with a 12.9% stake in Usiminas, claimed that Ternium should have made a tender offer to minority shareholders due to tag-along rights. In June, a Brazilian court ordered Ternium to pay CSN 5 billion reais (about $920 million). However, Ternium has appealed, and CEO Maximo Vedoya is optimistic since past rulings have generally favored their stance. Although Vedoya had mentioned potential investment cuts if the ruling was negative, he is now more positive about the company's future in Brazil and Mexico.
This legal outcome could impact Ternium's finances and investment strategies significantly. A victory might boost investor confidence and drive up stock prices, while a defeat could lead to a substantial payout and slow expansion. Investors should also consider Ternium's growth in northern Mexico and potential gains from the 2026 US-Mexico-Canada trade agreement review, which could offer significant growth opportunities.
The bigger picture: Enhancing trade ties.
Ternium is crucial to Mexico-Brazil trade. Vedoya believes that updating trade agreements between the two nations could spur industrial growth and yield broader economic benefits. With Mexico's incoming president Claudia Sheinbaum taking office on Tuesday, Vedoya remains optimistic about future industrialization plans. This signals promising growth prospects for Ternium and the wider industrial sector in both countries.