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Commercial Metals Closes USD 600m Acquisition of Gerdau US Rebar Steel Assets
Thursday 08 November 2018

8 November 2018 - Texas, US-based steel and metal manufacturer Commercial Metals Company (NYSE: CMC) has closed the acquisition of certain US rebar steel mill and fabrication assets from Brazil-based steel products producer Gerdau S.A. (NYSE: GGB), for USD 600m in cash, the company said.

The acquisition is expected to be accretive to earnings and cash flow within the first year after the transaction closes.

Once fully integrated, the combined operations are expected to generate approximately USD 40m in pre-tax operational synergies annually.

The acquisition includes 33 rebar fabrication facilities in the United States, as well as steel mills located in  Tennessee, Florida, New Jersey and  California, with annual mill rolling capacity of 2.5m tons.

Upon completion of the acquisition, CMC will have an expanded geographic footprint in the large construction regions in the US.

The acquisition will increase CMC's annual rebar and fabrication capacity and allow for the more efficient utilisation of its asset base to better serve customers.

After adding the incremental 2.7m tons of melt capacity, CMC will have approximately 7.2m tons of global melt capacity at the close of the transaction.

Commercial Metals said this acquisition aligns with its strategy to focus on its strength in concrete reinforcing products and leverages CMC's core competencies in rebar production and value added fabrication services to non-residential construction customers.

In addition, these assets provide the opportunity to optimise its product mix more fully in the US.
Commercial Metals company and its subsidiaries manufacture, recycle and market steel and metal products, related materials and services through a network including four electric arc furnace (EAF) mini mills, an EAF micro mill, a rerolling mill, steel fabrication and processing plants, construction-related product warehouses, metal recycling facilities and marketing and distribution offices in the US and in international markets.
Date Published: 08/11/2018
Target: Gerdau S.A./US rebar steel mill and fabrication assets
Country: USA
Deal Size: 600m (USD)
Sector: Machinery/Engineering
Type: Corporate acquisition
Financing: Cash
Status: Closed
Buyer: Commercial Metals Company