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Arcelor Consolidates Its Controlling Position in Companhia Siderurgica De Tubarao - 'CST'.

Article Excerpt
LUXEMBOURG -- Arcelor S.A. ("Arcelor") announces it has entered into definitive, binding agreements with Companhia Vale do Rio Doce ("CVRD") aiming at consolidating the shareholding control of Companhia Siderurgica de Tubarao ("CST") (the "Transaction") to be financed via a share capital increase by way of warrants (the "Capital raising") of approximately EUR 1 billion.

Transaction Summary

Arcelor and CVRD have entered into certain agreements pursuant to which:

--Arcelor has agreed to purchase from CVRD, directly and indirectly, 869,045,672 common shares which are not subject to the CST Shareholders' Agreement, representing 4.42% of the voting capital, and 9,381,163,397 preferred shares of CST, representing 29.96% of the non-voting capital, and other rights relating to the acquisition of common shares of CST which are the object of the call option granted by Acesita to CVRD referred to below, pursuant to the terms and conditions of the asset purchase agreement (the"Purchase Agreement"). The transfer of such assets is expected to occur on 15 September, 2004. This transaction is subject to conditions precedent consistent with a transaction of this nature, including inter alia approval by relevant anti-trust authorities;

--Arcelor and CVRD have agreed to anticipate the call option of Arcelor and put option of CVRD, granted in March 2003, relating to the purchase and sale of 4,034,524,170 common shares of CST held by CVRD and which are subject to the CST Shareholders' Agreement, representing 20.51% of the voting capital ("CVRD-CST Put and Call Agreement"), and which may be exercised upon the satisfaction of a number of conditions precedent consistent with transactions of its nature; and

--CVRD has agreed to transfer to Arcelor its rights and obligations under certain agreements entered into between Acesita S.A ("Acesita"), CVRD and Arcelor, pursuant to which Acesita agreed to transfer, upon the satisfaction of certain conditions precedent, to CVRD, 1,460,138,708 common shares that Acesita holds indirectly in CST, representing 7.42% of the voting capital, and which are subject to the CST Shareholders' Agreement (the "Acesita-CST Put and Call Agreement", and together with the CVRD-CST Put and Call Agreement, the "Put and Call Agreements").

The Put and Call Agreements are subject to the satisfaction of conditions precedent consistent with transactions of that nature. The options are exercisable upon the earlier of (i) the termination of the CST Shareholders' Agreement, (ii) the acquisition by Arcelor of all the ordinary shares subject to the CST Shareholders'...

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