Toronto-based Gerdau Ameristeel, which says it has the cash and credit to finance the deal, subject to regulatory approval. If approved, it is expected to close before the end of 2004, according to Gerdau Ameristeel.
The four North Star mills would join with Gerdau's 11 mills in Pennsylvania, Florida, Kentucky, North Carolina, Tennessee, Georgia, New Jersey and the firm's three Canadian mills in Ontario and Manitoba. Phillip Casey, president and CEO of Gerdau Ameristeel, says the deal is a "dynamic step in the continuing revitalization of the North American steel industry."
The steel industry is facing stiff competition from imports, reducing investment interest in steel mills and processing plants. Nucor, based in Charlotte, NC, is the largest US steelmaker using recycled metal with $6.2 billion in sales in its most recent year.
Gerdau Ameristeel has bought a number of other US and Canadian steel operations and is a close second to Nucor in the industry. Reflecting those acquisitions, Gerdau Ameristeel said last month that its second quarter earnings were up to $105.5 million, from a loss of $6.9 million in the same period of 2003, while sales grew to $733.8 million, from $440.8 million the year before.
Minnetonka-based Cargill, with more than $60 billion in annual sales and the world's largest processor of food and agricultural products, earlier sold its minimill at Kingman, AZ to Nucor.
North Star's four mills produce about 2 million tons of wire rods, steel bars and similar products called long steel in the industry. In addition, the four specialty-products plants, like Duluth's, produce about 300,000 tons of products annually.
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