May 8 2006
Gerdau Ameristeel Corporation has announced that its U.S. operating subsidiary, Gerdau Ameristeel US Inc., has entered into a definitive agreement to acquire all of the outstanding shares of Sheffield Steel Corporation of Sand Springs, Oklahoma.
Sheffield Steel is a mini-mill producer of long steel products, primarily rebar and merchant bars with annual shipments of approximately 550,000 tons of finished steel products. Sheffield operates a melt shop and rolling mill in Sand Springs, Oklahoma, a smaller rolling mill in Joliet, Illinois, and three downstream steel fabricating facilities in Kansas City and Sand Springs.
Subject to certain closing adjustments, the purchase price for all of the shares of Sheffield is expected to be approximately $76 million in cash plus the assumption of approximately $94 million of debt and certain long-term liabilities, net of cash. The transaction, which is subject to Sheffield shareholder approval, satisfactory completion of anti-trust and applicable regulatory reviews and other customary closing conditions, is expected to close in the second quarter of 2006. Gerdau Ameristeel has sufficient cash on hand to fully fund the transaction and no additional debt will be incurred.
Mario Longhi, President and CEO of Gerdau Ameristeel commented: “The combination of the Sheffield team with Gerdau Ameristeel is a dynamic step in the continuing consolidation and revitalization of the North American long product steel sector. The addition of the Sheffield people, resources and assets will expand Gerdau Ameristeel’s primary rebar markets to the Southwest United States.”
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