Brazil CSN Eyes R$ 3 Billion Sale of German Unit to Spain's Megasa
Brazilian steelmaker CSN has signed a binding term sheet granting Spain's Megasa exclusivity to negotiate the purchase of its German subsidiary for €550 million.
Brazilian industrial heavyweight Companhia Siderúrgica Nacional (CSN) has taken a major step toward addressing its heavy debt burden by entering negotiations to sell its German long steel subsidiary, Stahlwerk Thüringen (SWT), to the Spanish industrial group Megasa. According to a securities filing released on October 9, 2026, the two companies signed a binding term sheet that values the German plant at an enterprise value of €550 million (approximately R$ 3 billion, or $616 million USD).
The agreement does not represent a finalized sale but rather grants Megasa, through its holding company Bipadosa, a 10-week exclusivity period to negotiate definitive agreements and finalize the acquisition. Located in Unterwellenborn, Germany, SWT is a specialized long steel producer with an annual capacity of 1.1 million metric tons. CSN originally acquired the German mill in 2012 as part of a global expansion strategy. However, the Brazilian conglomerate is now systematically reversing its international footprint to cope with severe financial pressures at home.
For ordinary Brazilians and the broader domestic industry, CSN is more than just a steelmaker; it is a national cornerstone. Founded in the 1940s as a state-owned enterprise during Brazil's industrialization push, it was privatized in the 1990s and has since grown into a massive conglomerate spanning steel, mining, cement, logistics, and energy. The health of CSN is closely tied to the domestic construction and manufacturing sectors, and its high debt load has long raised concerns about its ability to sustain investments and employment in Brazil.
The potential divestment of the German plant is a critical milestone in CSN's urgent strategy to slash its massive debt load and lower its leverage from a five-year high. The company ended the second quarter of 2026 with a staggering net debt of R$ 42.1 billion and a leverage ratio of 3.49 times net debt to EBITDA. This high leverage has restricted the company's financial flexibility, prompting management to prioritize asset sales and capital restructuring.
The completion of the deal remains subject to the execution of definitive agreements and customary regulatory approvals. Beyond the German steel plant, CSN is also exploring other major asset sales, including a potential multi-billion-real divestment of its cement division, CSN Cimentos, as it aims to significantly reduce its overall debt in 2026.
What it touches
The transaction directly affects Companhia Siderúrgica Nacional (B3: CSNA3; NYSE: SID). Successful execution of this divestment is expected to ease pressure on the company's credit profile and potentially alleviate the discount on its shares and American Depositary Receipts (ADRs) as investors react to a lighter debt load.