HOUSTON (AP) — Engineered products maker Quanex Corp. said Monday it plans to sell its automotive supply business for $1.57 billion to Gerdau SA, leaving its building products unit as a standalone business.
Quanex said the moves come after a strategic review that began in May after the company's two businesses struggled amid slowdowns in North American car production and the U.S. housing sector.
The company first plans to sell Quanex Building Products to its existing shareholders in a taxable transaction. For each share owned, the company's shareholders will receive one share in the new Quanex Building Products.
The company recently lowered its outlook for the building products unit, citing the slumping U.S. housing market and a related slowdown in remodeling activity.
Once the building products move is complete, Quanex will sell its vehicular products unit for $39.20 per share in cash to Gerdau, a Brazil steelmaker with operations in North America. Based on the 40 million shares outstanding at the end of July, the total price is $1.57 billion. The per-share price is also a premium of 7 percent over Quanex's closing price of $36.24 Friday.
The company expects the deals to close in the first quarter.
