Gerdau expands operations in Mexico

Acquisition of 49% of Corsa Controladora and a partnership in the construction of a mill reinforces the Gerdau Group’s position in the third largest market in the Americas

Today, the Gerdau Group signed a letter of intention to acquire 49% of Corsa Controladora, which includes the Aceros Corsa steel mill and its distributors. The Aceros Corsa mill is located in the city of Tlalnepantla, close to Mexico City. It has 480 employees and an annual installed capacity of 150 thousand metric tons of steel and 300 thousand metric tons of rolled products. Gerdau Group is to disburse US$ 100,5 million in this transaction to aquire its stake in Corsa Controladora. The agreement is subject to the approval of the Mexican Untitrust Authority. The transaction is expected to be concluded by the end of this year. Management of the company will be shared with the current shareholders. In 2006, Corsa Controladora generated a total of US$ 146 million in sales revenues and a net profit of US$ 19 million. In addition to acquiring 49% of the capital stock of Corsa Controladora, the Gerdau Group also entered into an agreement with the current shareholders to build a new steel mill in Mexico, with an estimated investment of US$ 400 million. Located in the vicinity of Mexico City, the industrial plant will begin operations in the beginning of 2010 and will have an annual installed capacity of 700 thousand metric tons of steel and rolled products. The plant is expected to create around 360 new jobs. "The partnership strengthens the Gerdau Group’s presence in the third largest steel consumer market in the Americas and allows us to continue as one of the agents in the consolidation process of the global steel business," says André Gerdau Johannpeter, president of the Gerdau Group. The new mill will be focused on the production of structural shapes, used mainly in civil construction. Today, a significant portion of the demand for structural shapes is met by imports.
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