Gerdau Ameristeel to acquire Chaparral Steel
Gerdau Ameristeel Corporation has signed a definitive merger agreement to acquire Chaparral Steel Company, for $86 per share in cash. Chaparral Steel Company’s Board of Directors has unanimously approved the transaction and will recommend to Chaparral Steel Company’s shareholders that they vote in favor of the offer. The offer price values Chaparral Steel Company’s equity at $4.22 billion.
Chaparral is the second largest producer of structural steel products in North America. It operates two mini-mills, one located in Midlothian, Texas, and the other located in Dinwiddie County, Virginia. The company has approximately 1,400 employees and an annual installed capacity of 2.9 million metric tons.
Gerdau Ameristeel expects that the combination with Chaparral Steel Company’s operations will generate annual pre-tax operating synergies in excess of $55 million by the end of 2008.
The transaction is subject to the approval of Chaparral Steel Company’s shareholders and other customary closing conditions, including regulatory approvals, and is expected to close before year end.