Gerdau Ameristeel Corporation announced Tuesday that it has signed a definitive merger agreement to acquire structural steelmaker Chaparral Steel Company.
Chaparral's Board of Directors has approved the $86 per share buyout and will recommend to its shareholders that they vote in favor of the offer. The deal values Chaparral's equity at $4.22 billion.
In a statement regarding the transaction, Gerdau Ameristeel president and CEO Mario Longhi said, "This strategic combination is an excellent fit for us and it broadens our product portfolio and gives us a full range of structural steel products".
The transaction is subject to the approval of Chaparral's shareholders and other customary closing conditions, including regulatory approvals, and is expected to close before year-end.
Chaparral Steel Company is the second largest producer of structural steel in North America and also a major producer of bar products. It operates two mini mills, including one in Midlothian, Texas and another in Dinwiddie County, Virginia. The company's total annual capacity is 2.9 million metric tons.
Gerdau Ameristeel is the second largest mini mill in North America with an annual manufacturing capacity of over nine million tons of finished steel products. Gerdau Ameristeel is 67 percent owned by Gerdau S.A.