Feb. 21, 2007 — Commercial Metals Co. announced that it had submitted a bid to acquire Valjaonica Cijevi Sisak (Sisak) from the Croatian Privatization Fund. The bid was submitted through CMC’s Swiss subsidiary, Commercial Metals International AG.

CMC is reportedly one of two bidders that submitted qualified bids in connection with the proposed privatization of the electric-furnace based steel pipe mill. CMC's bid includes the assumption of debt due to or guaranteed by the Croatian government in the aggregate amount of approximately 180,000,000 Croatian kuna (approximately U.S. $32.2 million), as well as the assumption of existing trade payables and a minimum purchase price for all Sisak shares of 37,000,000 kuna (approximately U.S. $6.6 million). There is a potential for additional payments of 44,000,000 kuna (approximately U.S. $7.9 million).

Sisak currently has approximately 70,000 tonnes melting capacity and about 300,000 tonnes of tubular manufacturing capacity. Its current product line includes seamless, welded and cold-processed pipe. In addition to continuing the existing operations at the mill, CMC is considering future expansions including capital expenditures and working capital increase of at least 347,000,000 kuna (approximately U.S. $62.1 million). The existing level of the employee work force, less normal retirements or other natural attrition, will be retained for a minimum of two years.

"We are very excited about the prospects for Sisak and look forward to promptly commencing discussions with the Fund to conclude a purchase contract,” said Hanns Zoellner, President of CMC's Marketing and Distribution segment. “With the experience and success we have enjoyed following the acquisition of a majority interest in CMC Zawiercie, our Polish mill, we are confident we can achieve the same results in Croatia. CMC's marketing group annually markets close to 500,000 metric tons of tubular products globally and has previously sold pipe products produced by Sisak. We know their Commercial Metals Bids to Acquire Croatian Mill reputation in the market as a dependable supplier of quality product and believe CMC offers a unique combination of electric arc furnace operating expertise and significantly enhanced marketing capability for the mill. Our strategy is to expand production capability in the key markets of Central and Eastern Europe. This acquisition would definitely fit with CMC's strategic objectives."

CMC’s bid is subject to execution of a definitive purchase contract.

Headquartered in Irving, Texas, Commercial Metals and its subsidiaries manufacture, recycle and market steel and metal products, related materials and services through a network including steel minimills, steel fabrication and processing plants, construction-related product warehouses, a copper tube mill, metal recycling facilities and marketing and distribution offices in the United States and in strategic overseas markets.