Gerdau S.A.- Their latest acquisition- Dale Recycling

In the world of M&A activity, Gerdau S.A. has picked up another trophy: Dale Recycling, a family-owned recycling facility. This is another step in Gerdau’s steady development of its position in recycled metals and the company’s sustainability mission.

With a hefty purchase price of $60 million, the assets of Dale Recycling will help Gerdau prepare itself for the industry’s next big contribution to global sustainability efforts in the automotive industry.

With this purchase, Gerdau gains more recycled source material to help meet its own growing needs. Shortages of recycled metals, especially in the U.S., are only likely to continue, so this could be a smart move for the company.

Gerdau was founded in Brazil in 1901 and is now a leading steel producer globally with operations in 10 countries on five continents, including Brazil, the United States and Canada. Its products and activities focus on the steel longs segment and scrap metal recycling.

Globally, Gerdau produces 73% of its steel using recycled material. It is the biggest recycler in Latin America, and its steelmaking process recycles 11 million tons of scrap annually.

This latest acquisition is complemented by Gerdau announcing a technical feasibility study for a greenfield development of a special steel plant in Mexico, with a capacity of 600,000 mt per year. This adds to the positive direction Mexico is taking in the auto industry and reflects a growing trend of near shoring in the U.S.

According to Gerdau CEO Gustavo Werneck, the company is sourcing opportunities to add value to its portfolio and future consumption trends. For an investment of approximately $500-600 million, Gerdau also identified possible locations for a new plant in central Mexico, where it already makes steel. Read more about the company’s footprint in Mexico in the Gerdau article written by our sister company SMU earlier this year.