Gerdau to buy Chaparral for $4.22 bn
The US unit of Brazilian steelmaker Gerdau SA, will buy Chaparral Steel Co for $4.22 bn in cash.
By Agencies |
NEW YORK: Gerdau Ameristeel Corp, the US unit of Brazilian steelmaker Gerdau SA, will buy Chaparral Steel Co for $4.22 billion in cash, adding to consolidation in the steel industry.
Chaparral shareholders will receive $86 a share, Tampa, Florida-based Gerdau said today in a statement. That's 14 per cent more than Chaparral's closing price of $75.69 and 20 per cent higher than on April 25, when the company said it hired Goldman, Sachs & Co to explore a merger or sale.
Chaparral, based in Midlothian, Texas, joins Algoma Steel Inc. and Lone Star Technologies Inc. as acquired North American steel producers. Last year, there was roughly $95 billion in steel mergers, according to media.
``This transaction reaffirms our strategy to participate in the global steel consolidation,'' Andre Johannpeter, Gerdau SA's chief executive officer, said in the statement. Spokesman Cary D Baetz didn't immediately return an after-hours call seeking comment.
Chaparral has about 1,400 employees and yearly installed capacity of 2.9 million metric tons.
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.
Chaparral shareholders will receive $86 a share, Tampa, Florida-based Gerdau said today in a statement. That's 14 per cent more than Chaparral's closing price of $75.69 and 20 per cent higher than on April 25, when the company said it hired Goldman, Sachs & Co to explore a merger or sale.
Chaparral, based in Midlothian, Texas, joins Algoma Steel Inc. and Lone Star Technologies Inc. as acquired North American steel producers. Last year, there was roughly $95 billion in steel mergers, according to media.
``This transaction reaffirms our strategy to participate in the global steel consolidation,'' Andre Johannpeter, Gerdau SA's chief executive officer, said in the statement. Spokesman Cary D Baetz didn't immediately return an after-hours call seeking comment.
Chaparral has about 1,400 employees and yearly installed capacity of 2.9 million metric tons.
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.
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