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Report: ThyssenKrupp to buy Vale stake in Brazil steel plant venture, sell European unit interest to Tata Steel

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Report: ThyssenKrupp to buy Vale stake in Brazil steel plant venture, sell European unit interest to Tata Steel

ValeSA drafted a plan to sell its 26.87% stake in a steel slab plant,the most expensive foreign investment in Brazil that cost nearly US$10 billionto build, for US$1 plus the assumption of some debt to venture partnerThyssenKrupp AG,Reuters reported April 1, citing a source "close to the deal."

The plant reported €2.6 billion in liabilities by the end ofthe 2015 fiscal year.

Under the proposal, Vale will maintain its exclusive rightsto supply iron ore and pellets to the mill. The Brazilian iron ore miner alsowants a 10-year tail period, in which a partner is entitled to payment in theevent of a sale or the disposal of assets in a company.

The draft plan, yet to be approved by Vale's board, wouldsee ThyssenKrupp also assuming 10% of the contingent liabilities of loss-makingventure CSA Siderúrgica do Atlántico.

Negotiations between the two companies are in their"final stages," a second source told Reuters.

In other news, Tata Steel Ltd. is in advanced talks to acquire aninterest in ThyssenKrupp's European steel unit.

Several scenarios are being discussed, with a joint venturein which Tata Steel will have an option to increase the stake later being themost likely, the Rheinische Postreported, citing government sources in Berlin.