Nucor to acquire Gerdau Long Steel's bright bar assets
12 November 2015
Nucor Corporation has agreed to buy Gerdau Long Steel's Bright Bar assets located in Orrville, OH, and Cartersville, GA, for an undisclosed price. The acquisition is anticipated to close by the end of this month. The units, which have a combined annual production capacity of 75,000 tons, manufacture cold drawn steel bars for steel service centers and other markets across the U.S.
According to John Ferriola, Chairman, CEO and President of Nucor, this acquisition will strengthen Nucor's competitive position in cold finished bar and increase the company’s downstream participation in this market. It will also enhance Nucor’s geographic footprint and expand its product portfolio. Through this move, Nucor intends to boost its margins and manufacture value-added products to complement its current cold finish operations.
On Oct 22, Nucor reported its third-quarter 2015 results. The company’s profit declined roughly 7.5% to $227.1 million or 71 cents a share in the quarter. Revenues fell around 26% year over year to $4,225.5 million due to lower pricing and shipments.
Nucor anticipates lower earnings in the fourth quarter of 2015 compared to the third quarter owing to continued challenges in the global steel industry. Slow economic growth in China has been creating further overcapacity, resulting in considerable high levels of steel imports into the U.S.
Other well-placed companies in the basic materials sector include AK Steel Holding Corporation (AKS - Analyst Report), Agnico Eagle Mines Limited (AEM - Analyst Report) and Asanko Gold Inc.