Mexican steelmakers Altos Hornos de México (AHMSA) and Villacero have a signed a non-binding agreement to merge assets as a new company. The agreement gives the two parties 90 days to complete regulatory documents to move forward with the reported $300 million deal.
A June 18 filing with the Mexican Stock Exchange said:
“The agreement signed by Alonso Ancira, president of AHMSA, and Julio Villarreal, president of Grupo Villacero, includes financial obligations that will allow AHMSA to settle liabilities and capitalize through the capture of fresh resources, in order to ensure its operational continuity in the long term.”
AHMSA has been in financial straits for several years and reported a steel segment operating loss of $95 million in Q4 2019. The COVID-19 pandemic added to the company’s woes as steelmaking operations were disrupted by supply chain issues and manufacturing closures. The merger is welcomed by local suppliers who say they have been owed money for over a year.
Earlier this year, South Korean steel producer POSCO and Techint, owner of Ternium and Tenaris, expressed interest in acquiring the AHMSA assets.
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