The merger agreement was unanimously approved by the Boards of Directors of both companies.
"After an extensive review of all options for the company, Chaparral's Board of Directors has determined that this transaction creates substantial value for our stockholders," stated Tommy A. Valenta, Chaparral's President and Chief Executive Officer. "Over the past few years, our people have worked hard to enhance our operations, improve our competitive position, and transform Chaparral into one of the most profitable steel companies in the world."
Mr. Valenta added, "In addition to delivering significant value to our stockholders Chaparral will be joining one of the largest and most respected steel companies in the world. Gerdau Ameristeel shares similar values with our company, including a focus on profitability, developing a loyal customer base, providing a safe workplace, and a commitment to quality products. As part of this new and larger company, we will have a more diversified product offering that will enhance our ability to better serve both existing and new customers."
Closing of the transaction is subject to the approval of Chaparral's stockholders and other customary closing conditions, including regulatory approvals. The merger is expected to close later this calendar year.
Goldman, Sachs & Co. acted as the Company's exclusive financial advisor and Wachtell, Lipton, Rosen & Katz acted as legal advisor.
Certain statements contained in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, risks associated with uncertainty as to whether the transaction will be completed, costs associated with the transaction, the failure of either party to meet the closing conditions set forth in the merger agreement, including stockholder approval, regulatory conditions, the impact of competitive pressures and changing economic and financial conditions on the Company's business, construction activity in the Company's markets, changes in the costs of raw materials, fuel and energy, the impact of environmental laws, unexpected equipment failures, the effect of foreign currency valuations and regulatory and statutory changes, and risks which are more fully described in the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2006 filed with the Securities and Exchange Commission.
Chaparral Steel Company, headquartered in Midlothian, Texas, is the second largest producer of structural steel beams in North America. The Company is also a supplier of steel bar products. -Chaparral Steel
