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Nucor offers $1.07 billion for Canadian steel firm

From staff, wire reports

Steel products maker Nucor Corp. said Tuesday it has offered $1.07 billion for Canada’s Harris Steel Group Inc., whose board is recommending that its shareholders accept the all-cash bid.

Nucor, which makes steel from recycled metal at its
“minimill” operations across the United States, including one that employs 630 in Decatur, said the deal would broaden its geographic reach and give it opportunities to grow.

Nucor is offering 46.25 Canadian dollars ($39.69) for each Harris Steel share, a 6 percent premium over Harris’ closing price of 43.49 Canadian dollars ($37.32) Friday on the Toronto Stock Exchange.

This is the latest in numerous Nucor expansions, including two at its Decatur plant. The company is completing a $167 million sheet steel galvanizing facility for automobiles and other high-end steel products.

It recently began work on a $16.8 million Decatur facility to receive shipments of direct reduced iron, a raw material used in steel production.

The offer values Harris’ stock at $1.25 billion Canadian dollars ($1.07 billion), according to Nucor. Harris also had 123 million Canadian dollars ($105.5 million) in debt at the end of September.

The tender offer will be open for at least 35 days and has the support of the boards of both companies, the news release said.

In addition, the companies said John Harris, chairman and chief executive of Harris Steel, and other members of the Harris family and Paul Kelly, Harris Steel’s president and chief operating officer, have agreed to tender their shares to Nucor, giving Nucor more than 50 percent of Harris Steel shares. The deal also requires regulatory approval in the United States and Canada. Nucor plans to allow Harris Steel to operate as a separate, wholly owned subsidiary once the deal is completed.

The companies have been partners for the past three years.

“Harris provides Nucor with immediate and broad geographical reach and with considerable scale and growth opportunities,” Nucor said in a news release.

Nucor expects the acquisition to immediately bolster earnings.

In October, Charlotte-based Nucor announced plans to expand operations in Memphis, by adding a $230 million, 850,000-ton annual capacity mill there that will employ more than 200 people.

Nucor, the nation’s largest recycler, has operations in 17 states and also announced last year a new $27 million Utah facility plus the Decatur expansions.

Nucor shares closed Friday at $54.66 on the New York Stock Exchange.

Copyright 2005 THE DECATUR DAILY. All rights reserved.
AP contributed to this report.

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