Co-Steel and Gerdau Steel to merge North American mills
According to recent news in the market, Brazilian producer Gerdau Steel will merge with the North American operations of Canadian steel producer Co-Steel. The headquarters of the new venture will be in Tampa, Florida. Gerdau is a 101-year old Brazilian firm with 12 million tons of steel capacity in Brazil, Chile and Uruguay. The merger plan calls for the merging of 11 mini-mills located in the US and Canada with annual capacity of more than 6.8 million tons of finished steel and bar products. As a result of the deal valued at $382 million, the new Gerdau AmeriSteel Corp will be a world-class steel enterprise with annual revenues worth about $1.75 billion. As fewer North American producers have been able to be successful in the marketplace due to foreign competition, this merger is being described as part of a larger consolidation trend taking place in the North American steel industry. Among Co-Steel's North American operations involved in the merger are Co-Steel Lasco in Whitby, Ontario which makes a wide selection of steel products including angles, channels, flats, and rebar; and rebar mill Co-steel Sayreville in New Jersey and wire rod mill Co-Steel Raritan also in New Jersey, and half ownership of Gallatin Steel in Kentucky, a flat rolled mini mill. According to current CEO of AmeriSteel Phillip Casey, who will become CEO of the new Gerdau AmeriSteel, these mini mills will be integrated with 29 downstream fabrications and specialty product businesses and a ferrous scrap operation Co Steel Recycling in Whitby Ontario, resulting in better service to long product customers and improved operating efficiencies.