Gerdau Ameristeel buys California mill for $165M

Gerdau Ameristeel, part of Brazilian steel company Gerdau SA, has agreed to buy the Tamco steel rebar mill in Rancho Cucamonga, Calif., from the mill's three existing stakeholders for a total of $165 million in cash before transaction costs and working capital adjustments.Gerdau Ameristeel will...

Gerdau Ameristeel, part of Brazilian steel company Gerdau SA, has agreed to buy the Tamco steel rebar mill in Rancho Cucamonga, Calif., from the mill's three existing stakeholders for a total of $165 million in cash before transaction costs and working capital adjustments.

Gerdau Ameristeel will pay $82.5 million to Ameron International Corp., which currently holds a 50 percent stake in the mill, and another $82.5 million to Mitsui & Co. (U.S.A.) Inc. and Tokyo Steel Manufacturing Co. Ltd., which own the remaining 50 percent.

The deal is expected to close within about 45 days.

Ameron said it expects to record a pretax gain of about $50 million and net cash proceeds of about $60 million from the sale of its stake in the Tamco mill.

The mill, which has been hurt in recent years by the recession and the weak construction markets in the West, posted an after-tax loss of $12 million in 2009.

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