Commercial Metals To Acquire Certain Rebar Assets From Gerdau For $600 Mln

(RTTNews) - Commercial Metals Company (CMC) announced an agreement to acquire certain U.S. rebar steel mill and fabrication assets from Gerdau S.A. (GGB) for a cash purchase price of $600 million. The acquisition includes 33 rebar fabrication facilities in the United States, as well as steel mills with annual mill rolling capacity of 2.5 million tons.

Commercial Metals expects the acquisition to be accretive to earnings and cash flow within the first year after the transaction closes. Once fully integrated, the combined operations are expected to generate approximately $40 million in pre-tax operational synergies annually. The transaction is supported by a fully committed $600 million long-term facility.

The acquisition will increase CMC's annual rebar and fabrication capacity. After adding the incremental 2.7 million tons of melt capacity, CMC will have approximately 7.2 million tons of global melt capacity at the close of the transaction.