TMCnet News
BlueScope Steel agrees to buy IMSA Steel Corp for US$730 million to double US business(Associated Press WorldStream Via Thomson Dialog NewsEdge) MELBOURNE, Australia_BlueScope Steel Ltd., Australia's largest steelmaker, confirmed Thursday it has agreed to buy IMSA Steel Corp. for US$730 million (507 million) from Luxembourg-based Ternium SA to more than double the size of its U.S. operations. Ternium announced the deal Wednesday covering most of its U.S. operations. The acquisition will make BlueScope the second-largest steel building construction company in the United States behind Houston's NCI Buildings Systems Inc., and provide a market for its Australian steel, Chief Executive Paul O'Malley told reporters on a conference call. "This doubles our network of builders from 1,000 to 2,000 across the entire U.S. and increases our manufacturing footprint ... across the entire U.S.," O'Malley said. BlueScope has been seeking acquisitions to meet growing demand for steel products and build on its competitive advantages. It has been keen to expand its downstream businesses, particularly its existing Butler pre-engineered buildings unit, to boost earnings that have been crimped by higher costs for raw materials and freight. IMSA Steel had sales in the year through 2006 of about US$1.27 billion, up 11.5 percent from US$1.14 billion a year earlier. "The acquisition is a positive and it's in the direction BlueScope's been going and makes sense from a strategic view," said Peter Rudd, an analyst at stockbroker Tolhurst Noall in Melbourne. Rudd, who recommends clients hold the stock, said despite a downturn in the U.S. housing market, there was still demand for the commercial and nonresidential construction. Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. |