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Gerdau S.A. to Sell 50% Interest in Gallatin Steel to Nucor-弹簧展-2015第十六届广州国际弹簧工业展览会-全球最大弹簧展会-巨浪展览-The 16th China(Guangzhou)Int’l Spring Industry Exhibition
9/22/2014 弹簧展- -全球最大弹簧展会- Spring Industry Exhibition |
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Brazilian steel maker, Gerdau S.A. (GGB) recently announced the signing of an agreement to sell its 50% interest in Gallatin Steel Company to Nucor Corporation (NUE). The news, coming on Sep 15, lifted the company’s American Depository Receipt (:ADR) price by a marginal 0.4%.
Kentucky-based Gallatin Steel Company specializes in melting scrap, pig iron and hot briquetted iron. This flat rolled mini-mill can produce approximately 1.8 million tons of steel with varying carbon grades.
Similar to Gerdau, ArcelorMittal (MT) has also agreed to sell its 50% interest in Gallatin Steel to Nucor Corporation. The total transaction value has been fixed at $770 million. The sale, subject to customary conditions, is expected to close by 2014 end.
This non-core asset sale will benefit Gerdau by freeing up resources that can be utilized for expanding its core operations. Moreover, the disposition will have no impact on the company’s credit rating of ‘Baa3’ provided by Moody’s.
Gerdau remains well positioned in the Brazilian steel industry, given the growing demand for steel amid increasing government investments in nation building. Exiting 2013, the company had a total installed production capacity of over 25 million tons of steel per year. However, this does not shield the company from risks associated with rising raw material costs, foreign currency fluctuations, stiff competition and cyclical nature of the industry.
The Zacks Consensus Estimate for Gerdau is pegged at 40 cents per ADR for 2014 and 51 cents per ADR for 2015.
弹簧展-2015第十六届广州国际弹簧工业展览会-全球最大弹簧展会-巨浪展览-The 16th China(Guangzhou)Int’l
Spring Industry Exhibition
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