Gerdau announces the merger of its subsidiaries Sidertúl and Aceros Corsa, which must be approved by the Federal Economic Competition Commission (Cofece) of Mexico.

Through a statement, Gerdau S.A. and Metalúrgica Gerdau S.A. (collectively, the “Companies”) inform their shareholders and the market in general that on August 18, 2021, the Board of Directors of Gerdau S.A. approved the corporate reorganization of its Mexican subsidiary Sidertúl and Aceros Corsa, located in Mexico and controlled jointly by the Companies with the group formed by Corcre, S.A.P.I. de C.V. and Juan Angel Córdova Creel (jointly, “Grupo Córdova”).

In general, the corporate reorganization approved by the Board of Directors involves the merger of the companies Sidertúl and Aceros Corsa by Gerdau Corsa (“Merger”) and is part of the process of reorganization and simplification of the ownership structure in Mexico.

The merger has the objectives of:

• Strengthen the financial structure of Gerdau Corsa, with reductions in its leverage and financial expenses.
• Centralize the main commercial activities to capture operational efficiency gains in the companies involved.
• Optimize internal processes to capture synergies and economies of scale to reduce administrative, operational and tax costs.

Sidertúl

As a preliminary step to the Merger, Grupo Córdova will acquire 16.84% of the capital stock of Sidertúl, for $ 32 million 500,000 to match its participation in the capital stock of Gerdau Corsa after the Merger (“Sale”).

As a consequence of the Sale and Merger, Gerdau S.A. It will indirectly increase its participation in the share capital of Gerdau Corsa from 70 to 75%, maintaining its shared control of Gerdau Corsa with Grupo Córdova.

The corporate reorganization will also reinforce the companies’ commitment to their operations in Mexico, an important and strategic market for their long-term vision.

The consummation of the Sale and Merger, which is expected to conclude in the fourth quarter of 2021, is subject to the approval of the shareholders of the companies involved and the Mexican antitrust agency, Cofece, and other conditions specific to this. type of corporate reorganization