Gerdau to consolidate Mexico operations

Gerdau S.A., a Brazil-based steelmaker and scrap processor with operations throughout the Americas, says it has asked a regulatory agency in Mexico for permission to merge the two business units it operates in that nation.

Gerdau says it intends to merge its Mexico-based subsidiaries Sidertúl and Aceros Corsa and has sought approval from Mexico’s Federal Economic Competition Commission (COFECE).

The company says its board of directors approved the move and calls it “part of the process of reorganization and simplification of the ownership structure in Mexico.”

Objectives of the merger listed by Gerdau include a reduction in “leverage and financial expenses,”  a centralization of commercial activities and improvements in economies of scale “to reduce administrative, operational and tax costs.”

Gerdau adds, “The corporate reorganization will also reinforce the companies’ commitment to their operations in Mexico, an important and strategic market for their long-term vision.” The steelmaker says the merger process is expected to conclude in the fourth quarter of 2021, subject to the approval of shareholders and COFECE.

The company’s Gerdau Corsa business unit is listed on the Gerdau Mexico website as the one operating seven scrap yards in Mexico. Gerdau Corsa describes itself as “the largest scrap metal recycler in all of Latin America.” It lists prompt scrap, plate and structural and tinplate scrap as grades it purchases.