Huaxin Building Materials Group (06655) plans to acquire a 99.99% equity stake in Brazil's National Steel and Cement Company for approximately US$1.642 billion.

Huaxin Building Materials Group (06655) announced that on November 7, 2026, the buyer (the Company) and the seller National Steel Company of Brazil (an independent third party) signed an equity acquisition agreement. Accordingly, on the basis of an agreed enterprise value of BRL12.7 billion (equivalent to approximately US$2.3085 billion), the buyer has conditionally agreed to acquire, and the seller has conditionally agreed to sell, a 99.99% equity stake in the target company National Steel and Cement Company of Brazil, for a total consideration estimated at approximately BRL9.0337 billion (equivalent to approximately US$1.642 billion, subject to adjustment based on net debt and working capital in the financial statements as of the closing date). Upon completion of the acquisition, the target company will become a controlled subsidiary of the Company, and the financial results of the target company will be consolidated into the Company's financial accounts. For more than a decade, overseas development (including greenfield construction or acquisitions) has been one of the Company's important strategies. The Company has a strong track record in successfully integrating and developing acquired companies, achieving post-acquisition performance improvements, and realizing target returns on overseas investments. Overseas development has two major benefits: first, this strategy enables the Company to achieve growth by relying on its talent base and the expertise and capabilities accumulated in industrial technology and production chain integration; second, it effectively offsets the adverse impact of declining demand in the domestic market. Currently, the Company's business covers 14 overseas countries, with overseas clinker capacity reaching 27.5 million tonnes/year and cement grinding capacity reaching 36.8 million tonnes/year. In 2026, with the domestic cement business facing severe challenges, overseas business became an important contributor to the Company's performance. The target company is located in Brazil. Brazil is the largest economy in Latin America and the fifth-largest country in the world by land area. Its 2025 GDP reached US$2.28 trillion, ranking eleventh globally. Brazil has abundant natural resources and a population of 215 million. Brazil has a friendly environment for foreign investment and huge potential for economic development, and was the first Latin American country to establish a comprehensive strategic partnership with China. Since 2022, with the gradual recovery of the Brazilian economy, cement demand has basically remained above 62 million tonnes, generally stable. The target company is the second-largest cement producer in Brazil, with 7 kiln line plants and 6 grinding stations, total cement capacity of 17 million tonnes/year (accounting for approximately 21% market share), and limestone reserves of approximately 2.2 billion tonnes. Its products mainly serve Brazil's two key markets of the Northeast and Southeast, and it has capacity, technology and operational performance above the industry average. This project is one of the Company's key initiatives to actively advance its overseas multi-business development strategy and establish a presence in emerging potential markets; it is a milestone event for the Company in opening up the South American building materials market. If successfully implemented, this project will mark the first entry of the Company and even Chinese cement enterprises into the Brazilian cement market. The Company will fully leverage its extensive successful experience in integrating acquired enterprises as well as its industrial, technological and management capabilities to further improve the target company's performance through this acquisition and achieve growth in investment returns.