Gerdau Ameristeel Acquiring North Star Steel

Gerdau Ameristeel Corp. announced that its U.S. operating subsidiary, Gerdau Ameristeel US Inc., has entered into definitive agreements with Cargill, Inc. and certain of its subsidiaries to purchase the fixed assets and working capital of four long steel product minimills in St. Paul, Minn.; Wilton, Iowa; Calvert City, Ky.; and Beaumont, Tex.; three wire rod processing facilities in Beaumont, Texas; Carrollton, Tex.; and Memphis, Tenn.; and a grinding ball facility in Duluth, Minn.

The purchase price for the acquired assets is $266 million in cash subject to adjustment for working capital fluctuations prior to the closing date. The agreement includes the assumption by Gerdau Ameristeel at the closing of substantially all of the liabilities of the businesses being acquired, including specific contractual obligations and selected employee liabilities.

The four North Star Steel minimills have an annual production capacity of about two million tons of long steel products, principally merchant bars, special bar quality steel, light structural shapes, reinforcing bar and wire rod. Customers include steel service centers, original equipment manufacturers and steel fabricators.

The four downstream product-manufacturing facilities have an annual production capacity of approximately 300,000 tons. The wire rod processing facilities produce reinforcing wire mesh, chain link fencing and industrial wire. The grinding ball facility produces grinding balls for crushing and processing of minerals in various mining industries.