Commercial Metals to Buy Rebar Assets From Gerdau for $600 Million -- Update
02 Janeiro 2018 - 02:24PM
Dow Jones News
By Colin Kellaher
Commercial Metals Co. (CMC) on Tuesday said it agreed to buy
certain U.S. rebar steel mill and fabrication assets from Brazilian
steelmaker Gerdau S.A. (GGB) for $600 million in cash.
Commercial Metals said the acquisition includes 33 rebar
fabrication facilities in the U.S., along with steel mills in
Tennessee, Florida, New Jersey and California, with annual mill
rolling capacity of 2.5 million tons.
Irving, Texas-based Commercial Metals said it will have about
7.2 million tons of global melt capacity at the close of the
transaction, which it expects will yield about $40 million in
annual pretax operational synergies.
Gerdau said the sale is part of its efforts to be more
profitable in an "extremely competitive steel market," adding that
the deal is "an important milestone in our strategy to reduce
financial leverage and focus on better return opportunities in the
markets where we operate."
Commercial Metals said the transaction, which is supported by a
fully committed $600 million long-term facility, will add to
earnings and cash flow within the first year. The deal is expected
to close before the end of 2018.
Write to Colin Kellaher at colin.kellaher@wsj.com
(END) Dow Jones Newswires
January 02, 2018 11:09 ET (16:09 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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