Co-Steel, Gerdau Combining Steel Operations

Co-Steel Inc., Whitby, Ontario, and Gerdau S.A. of Rio de Janeiro, Brazil announced the execution of a definitive agreement to combine their North American steel operations creating a company with anticipated annual revenue in excess of $1.7 billion.

Under the terms of the transaction agreement, Co-Steel will issue 146,588,194 common shares to acquire Gerdau S.A.'s affiliated steel holdings including Gerdau Courtice Steel, based in Cambridge, Ontario; Gerdau MRM Steel, based in Selkirk, Manitoba; and AmeriSteel, based in Tampa, Florida. Upon closing of the transaction, Co-Steel will be renamed Gerdau

"This combination is a defining moment that opens an exciting future for the employees, customers and shareholders of both companies," said Terry Newman, president and CEO of Co-Steel. "The combined strengths and compatible cultures of these companies provide the nucleus for realization of a shared vision of a world-class steel enterprise that can compete in today's global market. This transaction creates the financial resources, the operational critical mass and the professional talent pool needed to contribute to the revitalization of the North American steel industry."

The newly formed company will have a combined network of 11 mills with annual manufacturing capacity of more than 6.8 million tons of finished steel products.