Gerdau in $1.7 bln Ameristeel affiliate takeover

Gerdau SA to buy minority Ameristeel shares for $1.6 bln.

Gerdau SA, the Brazil-based producer of long rolled steel, said it plans to acquire the minority shares in Gerdau Ameristeel Corp. for about $1.6 billion or $11.00 per share in cash.
Gerdau SA already owns 66.3 percent of Gerdau Ameristeel, which is the second largest mini-mill steel producer in North America with annual manufacturing capacity of about 12 million tons of mill finished steel products. As a wholly-owned unit of Gerdau SA, Gerdau Ameristeel would be expected to realize global synergies and enjoy a lower cost of funding as a result of Gerdau SA's stronger credit ratings, the company said on Wednesday.

The transaction price represents a premium of 53.4 percent to yesterday's closing price of Gerdau Ameristeel on the NYSE.
Gerdau SA said it plans to fund the transaction through its existing cash resources and committed financing.

RBC Capital Markets, the company's independent valuator, said the consideration under the proposal is fair from a financial point of view to the shareholders of Gerdau Ameristeel, other than Gerdau SA and its related parties.

Gerdau SA has plants in 14 countries spanning the Americas, Europe and Asia, with total installed capacity of more than 25 million metric tons of steel. Gerdau Ameristeel serves customers throughout North America, through its vertically integrated network of mini-mills, scrap recycling facilities and downstream operations.