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Gerdau Ameristeel to buy Chaparral
Jul 11, 2007
Gerdau Ameristeel Corp. said on Tuesday it agreed to acquire Chaparral Steel Co. for $4.22 billion, in a move to diversify its product offering into high value added steel products. The deal has been unanimously approved by the boards of both Chaparral and Gerdau, the companies said in separate statements.
Chaparral is the second largest producer of structural steel products in North America and also a major producer of steel bar products. It operates two mini-mills, one located in Midlothian, Texas, and the other located in Dinwiddie County, Virginia. The company has approximately 1,400 employees and an annual installed capacity of 2.9 million t.
"The acquisition of Chaparral Steel Company is consistent with Gerdau Ameristeel's strategy to further diversify its product offering into high value added steel products. This strategic combination is an excellent fit for us and it broadens our product portfolio and gives us a full range of structural steel products. As a premium steel asset, Chaparral brings not only high quality products and assets but also a strong organization with excellent technical capabilities," Mario Longhi, Gerdau's chief executive, told STEEL GRIPS in a statement.
Toronto-based Gerdau Ameristeel said the combination with Chaparral will generate annual pre-tax operating savings in excess of $55 million by the end of 2008.
Gerdau Ameristeel is the second largest mini-mill steel producer in North America with annual manufacturing capacity of over 9.0 million tons of mill finished steel products. Through its vertically integrated network of 17 mini-mills (including one 50% owned joint venture mini-mill), 17 scrap recycling facilities and 51 downstream operations, Gerdau Ameristeel serves customers throughout North America.
Brazil's Gerdau, the majority stakeholder in Gerdau Ameristeel, is the largest long steel producer in the Americas. It has over 35,000 employees and operations in 13 countries. Gerdau Group has an annual installed capacity of 22.9 million t of steel and is one of the largest recyclers in the Americas.
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