Gerdau, Gerdau Ameristeel Enter Arrangement Agreement
07/06/2010 - Gerdau Ameristeel and Gerdau SA enter into a definitive arrangement agreement to implement their proposal to take Gerdau Ameristeel private at a price of US$11.00 cash per Common Share. If approved by shareholders, the transaction is expected to be completed in August 2010.
Gerdau Ameristeel Corp. and Gerdau SA have entered into a definitive arrangement agreement to implement the previously announced proposal to take Gerdau Ameristeel private at a price of US$11.00 cash per Common Share, valuing Gerdau Ameristeel's publicly held shares at US$1.6 billion.
The transaction will be implemented by way of a court-approved plan of arrangement under Ontario law.
Gerdau Ameristeel’s board of directors unanimously approved the transaction following the report and unanimous recommendation of a special committee of independent directors. The board’s approval indicates the arrangement has been determined to be fair to the Gerdau Ameristeel shareholders (other than the Gerdau SA shareholders and its related parties) and is in the best interests of Gerdau Ameristeel.
The Gerdau Ameristeel board of directors also determined unanimously to recommend to the shareholders that they vote their Common Shares in favor of the transaction.
A special meeting of shareholders to consider the arrangement will be held on August 10, 2010.
To be implemented, the arrangement will require approval by two-thirds of the votes cast by holders of Common Shares. Gerdau SA has agreed to vote all Common Shares held directly or indirectly by it in favor of the arrangement. The arrangement must also be approved by a simple majority of the votes cast by holders of Common Shares, other than Gerdau SA, Gerdau Steel North America Inc., their respective directors and senior officers, and any other related parties. The arrangement also requires approval by the Ontario Superior Court of Justice and will be subject to certain customary conditions.
It is anticipated that the transaction, if approved by shareholders, will be completed in August 2010.
Gerdau SA is a leading producer of long steel in the Americas and one of the world's largest suppliers of special long steel. It has plants in 14 countries spanning the Americas, Europe and Asia, with total installed capacity of more than 25 million tonnes of steel. It also is the largest recycler in Latin America.
Gerdau Ameristeel is the second largest minimill steel producer in North America, with annual manufacturing capacity of approximately 10 million tonnes of mill-finished steel products. Through its vertically integrated network of minimills, scrap recycling facilities and downstream operations, Gerdau Ameristeel serves a wide range of customers throughout the United States and Canada. Gerdau Ameristeel's majority shareholder is Gerdau SA.
