TOKYO (Reuters) - Nippon Steel & Sumitomo Metal said on Friday it has agreed new governance rules at Brazilian steelmaker Usinas Siderúrgicas de Minas Gerais (Usiminas) with co-owner Ternium SA in a bid to end their long-standing dispute.
More than three years of boardroom fights between Nippon Steel and Ternium for control of Usiminas have distracted management and hampered efforts to buffer Brazil's largest listed maker of flat steel from the country's worst recession on record.
The two parent companies have now agreed to new rules on filling senior roles at Usiminas and plan to settle outstanding legal disputes, Nippon Steel said in a statement.
"We, together with Ternium, are committed to moving forward with the turnaround of Usiminas," it said.
Under the new rules, the right to nominate the chief executive and the chairman of the board at Usiminas will alternate between Nippon Steel and Ternium every four years, or two consecutive 2-year terms.
For the first two year-term, Ternium plans to nominate Sergio Leite de Andrade as chief executive and Nippon Steel intends to nominate Ruy Roberto Hirschheimer as the chairman.
The two shareholders also decided to adopt an exit provision which may lead to either Nippon Steel or Ternium purchasing a certain number of Usiminas shares held by the other party, which would end the joint control of Usiminas, after five years from the May 2018 election of the executive board.
(Reporting by Yuka Obayashi; editing by Richard Pullin)