Brazilian steel company Gerdau''s US arm to acquire Chaparral for $4.22 billion
11 Jul 2007
Adding to consolidation in the steel industry, Gerdau Ameristeel Corp, the US unit of Brazilian steelmaker Gerdau SA, will buy Chaparral Steel Co for $4.22 billion in cash ina deal that will fetch Chaparral shareholders $86 a share. Gerdau is based in Tampa.
Chaparral based in Midlothian, Texas, has an installed capacity to produce 2.9 million metric tons of steel yearly.
It joins Algoma Steel Inc. and Lone Star Technologies Inc. as North American steel producers acquired by oversees firms. Steel industry acquisitions last year amounted to about $95 billion.
Andre Johannpeter, Gerdau SA''s chief executive officer, said in the statement, "This transaction reaffirms our strategy to participate in the global steel consolidation."
Shares of Chaparral gained $1.18, or 1.6 per cent, to $75.69 in Nasdaq Stock Market trading and have increased 71 per cent this year. Shares of Gerdau declined 25 cents, or 1.6 per cent, to $15.69 in New York Stock Exchange composite trading today and have increased 76 per cent this year.
