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Non-Tech : Chaparral Steel

CHAP 0.0350

-12.5%

Oct 14 4:00 PM EDT

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From: Condo	7/11/2007 6:35:51 AM
	of 2

TAMPA, FL (Thomson Financial) - Gerdau Ameristeel Corp said it has signed a definitive merger agreement to acquire Chaparral Steel Co for 86.00 usd per share in cash, valuing the group at 4.2 bln usd. Chaparral Steel (nasdaq: CHAP - news - people )'s board of directors has unanimously approved the transaction and will recommend to Chaparral Steel shareholders that they vote in favor of the offer. Gerdau Ameristeel expects that the combination with Chaparral Steel's operations will generate annual pre-tax operating synergies in excess of 55 mln usd by the end of 2008. It expects the transaction to be slightly dilutive to its 2007 and 2008 earnings per share after considering expected synergies and after a share issue it is contemplating to follow the closing of the deal. taking into effect the contemplated equity issuance. Chaparral is the second largest producer of structural steel products in North Americaand also a major producer of steel bar products. It operates two mini-mills, one located in Midlothian, Texas, and the other located in Dinwiddie County, Virginia. The company has approximately 1,400 employees and an annual installed capacity of 2.9 mln metric tons. tf.TFN-Europe_newsdesk@thomson.com

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