Baker & McKenzie’s China outbound team has advised a consortium of five Chinese companies – consisting of CITIC Group, Anshan Iron & Steel Group Corporation, Baosteel Group Corporation, Shougang Corporation and Taiyuan Iron & Steel Group Co., Ltd. – on its acquisition, through a special purpose vehicle, of a 15% stake in Companhia Brasileira de Metalurgia e Mineração (CBMM) for a consideration of USD1.95 billion.
CBMM, a Brazilian company located in Araxá in the state of Minas Gerais, is the world’s leader in the development, industrialization and commercialization of niobium products. CBMM has over 50 years of successful operating history and has been a pioneer in developing niobium applications and related technology.
The multi-disciplinary Baker & McKenzie team was led by Beijing-based M&A partner, Bee Chun Boo, who was supported by on-the-ground teams in Beijing, Hong Kong and New York. The team led responsibility for overall documentation, negotiations and general transaction management.
Commenting on the transaction, Bee Chun said, “We are delighted to have acted for the consortium on this unique transaction. We see continued interest from Chinese companies in acquiring natural resources assets overseas, especially in Latin America, and have been and continue to be involved in many large and complex cross-border investments in natural resources. Chinese companies value our global platform and the benefits it brings to them – namely our dedicated bi-lingual team of lawyers in China who are able to manage and execute outbound projects, working closely with lawyers from other relevant jurisdictions, as well as our commercial approach in mitigating risks and developing solutions that meet the business and regulatory needs.”
Niobium is used mainly as an alloying element in the manufacture of steel, increasing strength and toughness of steel simultaneously, and resulting in end-products with enhanced efficiency and greater environmental benefits. Key applications include uses in automotive industry, oil and gas transmission pipelines, large structures such as bridges, towers and buildings, and aircraft engines.
Brazil holds the largest part of total known niobium reserves in the world, and CBMM owns the rights to the largest and highest grade identified niobium reserves globally.
