Tuesday , July 10, 2007 22:03ET
TAMPA, Fla., Jul 10, 2007 (The Canadian Press via COMTEX) -- Steel maker Gerdau Ameristeel Corp. (TSX:GNA), with operations in Canada and worldwide, is buying Chaparral Steel Co. in a friendly deal valued at US$4.22 billion in cash.
Gerdau Ameristeel, the second largest mini-mill steel producer in North America with locations in Chatham and Whitby, Ont. and Selkirk, Man., said late Tuesday the offer is worth US$86.00 per share in cash.
Chaparral Steel's board has unanimously approved the transaction and will recommend it shareholders vote in favour of the offer, the companies said in a release.
Chaparral trades on the Nasdaq, as does Gerdau Ameristeel.
Chaparral, which has about 1,400 employees and annual capacity of 2.9 million metric tons, is the second largest producer of structural steel products in North America and also a major producer of steel bar products. It operates a mini mill in Midlothian, Tex. and in Dinwiddie County, Va.
"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," Mario Longhi, Gerdau Ameristeel president and CEO said. "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."
Gerdau Ameristeel said the merger with Chaparral will generate annual pre-tax operating synergies of more than $55 million by the end of 2008.
The transaction is subject to regulatory approvals.
Gerdau Ameristeel is 67 per cent owned by Gerdau S.A., the 14th largest steel making company worldwide with about 35,500 employees and in 13 countries.
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