Gerdau Ameristeel enters into definitive arrangement agreement

Gerdau Ameristeel Corporation and Gerdau S.A. have entered into a definitive arrangement agreement to implement the previously announced proposal to take Gerdau Ameristeel private at a price of $11.00 cash per common share.

The transaction, which values Gerdau Ameristeel’s publicly held shares at $1.6 billion, will be implemented by way of a court-approved plan of arrangement under Ontario law.

The transaction has been approved unanimously by the board of directors of Gerdau Ameristeel (with the representatives of Gerdau S.A. declaring their interests in the transaction and abstaining from voting) following the report and unanimous recommendation of a special committee of independent directors. In doing so, the board of directors of Gerdau Ameristeel determined that the arrangement is fair to the shareholders of Gerdau Ameristeel and is in the best interests of Gerdau Ameristeel. The board of directors of Gerdau Ameristeel also determined unanimously (with the representatives of Gerdau S.A. declaring their interests in the transaction and abstaining from voting) to recommend to the shareholders of Gerdau Ameristeel that they vote their common shares in favor of the transaction. The complete recommendations and reasons of the special committee and the board of directors of Gerdau Ameristeel and full details of the terms of the transaction will be included in the management proxy circular that will be sent to holders of common shares in connection with the special meeting to consider the arrangement.

To be implemented, the arrangement will require approval by two-thirds of the votes cast by holders of common shares. Gerdau S.A. has agreed to vote all common shares held directly or indirectly by it in favor of the arrangement. The arrangement also will require approval by a simple majority of the votes cast by holders of common shares, other than Gerdau S.A., Gerdau Steel North America Inc., their respective directors and senior officers and any other “related parties”, “interested parties” and “joint actors”.