Huaxin Cement Co.'s attempt to acquire CSN's cement business faces unexpected resistance from Holcim Ltd., its largest shareholder owning roughly 42% of the Chinese company. Holcim, which previously sold these same Brazilian assets to CSN in 2021, has signaled opposition to advancing Huaxin's bid to the next phase, according to sources familiar with the matter.

The potential transaction valued at approximately 12 billion reais ($2.4 billion) could stall despite Huaxin's strong interest in expanding its Latin American footprint. CSN shares rose 2% Tuesday morning but remain down 32% year-to-date. Other bidders including Votorantim SA, Sinoma International and Polimix Concreto Ltd. are currently conducting due diligence, with binding proposals expected by early August.

Holcim's objection stems from its complex history with the asset, having divested it to CSN just three years ago. This creates an unusual dynamic where a major shareholder blocks its portfolio company's strategic move, potentially narrowing the buyer pool for one of Brazil's largest cement producers.

If Holcim maintains its position, the auction process becomes significantly more challenging for Huaxin, which entered Brazil in late 2024 through an $186 million acquisition of Embu SA Engenharia e Comercio. The outcome will likely reshape consolidation plans in Brazil's cement sector.