Mexican companies make acquisitions due to NAFTA

Mexican companies make acquisitions due to NAFTA

According to recent news in the market, Mexican steel companies are eying strategic alliances or making acquisitions since North American Free Trade Agreement (NAFTA) reduced duties on imported steel products. Under the scope of NAFTA, the duties on steel products imported to Mexico from US and Canada were decreased from 15% to 1% last year and they are abolished entirely in 2004. This reduction in the duties has forced Mexican steel producers to enter into strategic alliances to avoid from a decrease in their sales. For instance Mexican steel products services and distribution firm Grupo Collado entered into alliance with Ryerson-Tull, a US steel distribution company. Another Mexican steel producer Industria CH purchased majority stake in steel producer Grupo Simec.