November 19, 2007 — Gerdau Group, the Brazilian parent to Gerdau AmeriSteel, has agreed to buy Quanex Corp. for a reported $1.5 billion. Quanex is the holding company for a series of metal producing and processing companies, including the MacSteel specialty steel mini-mills in Jackson and Monroe, MI, and Fort Smith, AR. MacSteel also operates six processing and distribution centers for its specialty bar products.
Quanex shareholders have yet to approve the transaction.
By consolidating MacSteel with its AmeriSteel operations, Gerdau enhances its position as North America’s second-largest mini-mill chain, following Nucor Steel. Gerdau AmeriSteel lists a raw steel capacity of 9 million tons/year, and MacSteel has a nominal melting capacity of 1.3 million tons/year.
Prior to the merger, Quanex will spin-off its Building Products business to its shareholders as a stand-alone company called Quanex Building Products. The Building Products business consists of two operating divisions: Engineered Products supplies materials for window and door fabricators; and Aluminum Sheet Products (Nichols Aluminum) supplies finished and painted aluminum sheets to the building and construction market.
Current Quanex chairman and CEO Raymond A. Jean will become chairman and CEO of the new Quanex Building Products organization, and will be joined by the current senior leadership of Quanex.
According to Jean, "We spent considerable time evaluating strategic alternatives and have determined this is the best course of action, as the businesses will benefit from greater strategic focus and capital flexibility, offer exciting opportunities for employees, and deliver compelling value for shareholders. Shareholders will realize significant value in cash through the merger of Quanex with Gerdau, and they will continue to participate in the growth prospects of Building Products through ongoing ownership in this business."