SAO PAULO, Feb 23 (Reuters) - ArcelorMittal Brasil SA and Votorantim SA said on Thursday they will merge their long steel operations in Brazil, creating a company with a combined production capacity of 5.4 million tonnes of rolled steel per year.
Under the deal, Votorantim SA steel unit called Votorantim Siderurgia will become a subsidiary of ArcelorMittal Brasil SA, the local arm of the global steel producer.
Votorantim will hold an undisclosed minority stake in the resulting business, the companies said in a joint statement. No financial details of the deal were disclosed.
The combined firm will manage seven plants located in four Brazilian states. Votorantim will also include in the deal its stake in the joint venture Sitrel.
ArcelorMittal and Votorantim operate other businesses in Brazil and in South America that will not be affected by this deal. Votorantim, a family owned, unlisted firm, has mining, pulp, cement and financial businesses throughout the region.
The firms said the arrangement will save costs relating to long steel production and transportation.
“The plants of the combined company are geographically complementary,” the statement said.
The deal is subject to approval from antitrust bodies.
Votorantim long steel operations in Argentina (Acerbrag) and Colombia (PazdelRío) were not included in the agreement. (Reporting by Gabriela Mello and Marcelo Teixeira; Editing by Chizu Nomiyama and Bernadette Baum)