Steel Products
Reliance Steel & Aluminum to Acquire Metals USA Holdings
Written by John Packard
February 8, 2013
Reliance Steel & Aluminum announced Wednesday morning a definitive merger agreement whereby Reliance will acquire all outstanding shares of Metals USA Holdings Corporation for approximately $1.2 billion. This will make Reliance the largest service center chain in North America with assets over $6.5 billion and annual sales in excess of $10.0 billion.
The transaction is subject to approval by Metals USA stockholders along with other regulatory clearances and customary closing conditions and includes a 30-day “go-shop” period.
David Hannah, Chairman and CEO of Reliance, will continue as the Chairman and CEO of the combined company. Lourenco Goncalves, Chairman, President and CEO of Metals USA will retire upon the closing of the transaction which is expected during the second quarter 2013. The rest of the Metals USA management team will remain intact and continue to operate the company.
The addition of the Metals USA service centers will add 48 locations to the Reliance existing distribution network and are strategically located throughout the United States. Reliance plans to operate the Metals USA plants under its current brand names.
The acquisition will take the percentage of Reliance flat rolled business up a few percentage points, according to comments made by David Hannah, CEO of Reliance during a conference call with analysts announcing the acquisition. The expectation is for Reliance business mix to be approximately 15 percent flat rolled when Metals USA business is added to the group.
Combined, Reliance will encompass approximately 6-7 percent of the total service center market based on remarks made by Mr. Hannah.

John Packard
Read more from John PackardLatest in Steel Products

CRU: EC to toughen steel safeguards
The European Commission proposes cutting its steel import quota by almost half, with volumes exceeding the limit facing 50% duties. The region’s steel industry welcomes the move, while other steel-producing nations fear the consequences. CRU published an insight before this announcement, noting that more restrictive trade policy could significantly raise the cost of marginal supply […]

US and Canadian rig counts stabilize
US counts continue to hover just above historic lows, while Canadian figures remain comparatively healthy.

Plate market sources critique mill hikes amid current market conditions
Following spot market plate price increase notices issued by domestic mills this past week, participants are contemplating the rationale behind the increases and whether they will stick. Some sources anticipate that current market conditions will shift in November and believe the increases may set a new "pricing floor."

Oregon Steel Mills lifts plate prices by $60/ton
Oregon Steel Mills has joined other producers in announcing a price increase of at least $60 per short ton on steel plate.

CRU: Construction of pilot plant for green steel process starts
Voestalpine and partners have begun building an industrial-scale Hy4Smelt demonstration plant in Linz, Austria, which they hope will become key in the decarbonization of steel.