Mar. 30, 2023

Nippon Steel Corporation

On March 30, 2023, Nippon Steel Corporation (“NSC”) and Ternium Investments S.à r.l. and its three group companies (collectively, “Ternium”) agreed to amend the Amended and Restated Shareholders Agreement (the “Existing SHA”) dated October 17, 2018, setting forth the establishment of certain new governance structure of Usinas Siderúrgicas de Minas Gerais S.A. – Usiminas (“Usiminas”), and to transfer to Ternium a portion of the ordinary shares of Usiminas held by NSC.

Under the Existing SHA executed in 2018, NSC has jointly managed Usiminas as a member of the controlling group with Ternium and Previdência Usiminas (“PU”). Considering the tough business environment surrounding Usiminas, NSC and Ternium share the common understanding that stronger leadership by either shareholder in management would be required for further growth and increase of its corporate value of Usiminas. Now both parties share mutual perception and agreed that the new governance structure in which Ternium, having an extensive business network in Latin-America, has a more important role, would lead to the interests of all the stakeholders of Usiminas.

Summary of the agreements is as below:
I. Amendment to the Existing SHA
(i)  Nomination of the CEO and the Chairperson of the Board of Directors (“Chairperson”)
     Current: Alternately at every 4-year interval.
     New conditions: Ternium to nominate the CEO, NSC to nominate the Chairperson.
(ii) Composition and nomination of the Executive Board (the CEO and Vice-Presidents of Usiminas)
     Current: three (3) Executive Board members are nominated by NSC and Ternium respectively.
     New conditions: Ternium to nominate five (5) members including the CEO, and NSC to nominate one (1) member.

II. Share Transfer
(i)   Number of shares to be transferred by NSC: approximately 64.2 million ordinary shares.
*Shares owned by other Nippon Group (Mitsubishi Corporation and Metal One Corporation) are also to be transferred.
(ii)  Transfer date: The transaction is subject to approval by the Brazilian antitrust authority and other preconditions.
(iii) Transfer price: Brazilian Real 10 per share
(iv) Voting Ratio:  NSC : Current 31.4% → After closing 22.2%
　　　　　　　　　Ternium: Current 39.7% → After closing 49.5%
   * USIMINAS remains an equity method affiliate of NSC

Pursuant to the agreements, NSC will continue to jointly manage Usiminas with other controlling group members, Ternium and PU, with a view to increasing Usiminas' competitiveness and corporate value in the best interest of Usiminas and all of its stakeholders.

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