Sources: Commercial Metals Co., Irving, Texas; CP staff
On the heels of two nine-figure investments in concrete reinforcement milling capacity, Commercial Metals has agreed to acquire 33 rebar facilities plus steel mills in California, Florida, New Jersey and Tennessee from Gerdau S.A.
“This acquisition aligns with our strategy to focus on concrete reinforcing products and leverages CMC’s core competencies in rebar production and value added fabrication services to non-residential construction customers. These assets provide us the opportunity to optimize our product mix more fully in the U.S.,” says CMC CEO Barbara Smith. “Over the past several years we have repositioned our portfolio to focus on our core strengths of vertically integrated steel manufacturing and fabrication services as well as strengthen our balance sheet—placing us in the optimal position to take advantage of this unique growth opportunity. We plan to invest in these facilities to create efficiencies utilizing our expertise in the latest innovations for steel manufacturing and fabrication.”
The $600 million deal affords an expanded geographic footprint in the largest construction regions in the U.S., and increases CMC’s annual melt capacity by more than 50 percent, to 7.2 million tons. Full integration of legacy and Gerdau rebar facilities and mills is projected to yield approximately $40 million in pre-tax operational synergies.