Steelmaker and metal processor Gerdau SA says it has asked Mexico’s antitrust agency, the Federal Economic Competition Commission (COFECE), for permission to merge its Mexican subsidiaries. Consent from COFECE is pending.
São Paulo, Brazil-based Gerdau says it intends to merge steel mills Sidertúl and Aceros Corsa into Gerdau Corsa, its Mexico City-based joint venture with Grupo Córdova, which consists of businessman Juan Angel Córdova Creel and Mexican company Corcre. In addition to three steel mills, Gerdau Corsa operates seven metal recycling yards and three distribution sites in central Mexico.
On Aug. 18, Gerdau’s board approved the corporate reorganization. In addition to streamlining operations and tax savings, the reorganization “will reinforce the commitment of the companies with respect to their operations in Mexico, an important and strategic market for their long-term vision,” Gerdau says.
As a result of the deal, Gerdau will increase its share in Gerdau Corsa from 70% to 75%. As a first step in the merger, Grupo Córdova will acquire 16.84% of Sidertúl for $32.5 million to equalize its equity interest in Gerdau Corsa after the merger. The merger is expected to conclude in the fourth quarter of 2021.
Gerdau Corsa has 500 workers across all of its locations and generates $55 million in sales per year. Based in Mexico City, Sidertúl employs 400, and the company generates $195.9 million in annual sales. Tlalnepantla de Baz, Mexico-based Aceros Corsa has 360 employees and generates $182.7 million in annual sales.
Gerdau operates 13 steel mills, 22 collection and recycling yards, and six shredding facilities in the U.S. and Canada. The company buys, sorts, processes, prepares, packages, and sells all grades of ferrous and nonferrous metal. Gerdau’s 6,000 employees in the U.S. and Canada are part of a 30,000-strong multinational workforce that produces long and specialty steel, and processes metals in 10 countries in the Americas.
Photo Courtesy of Gerdau. Caption: Car bodies await shredding at Gerdau’s Midlothian, Texas, facility.