updated 7/11/2007 10:57:14 AM ET 2007-07-11T14:57:14

Chaparral Steel Co. has accepted a $4.22 billion takeover offer from Canada’s Gerdau Ameristeel Corp. in the latest consolidation move in the steel industry.

Chaparral said late Tuesday that the boards of both companies have approved the acquisition for $86 per share in cash. That was a 14 percent premium over Chaparral’s closing price on Tuesday.

The deal is subject to shareholder and regulatory approvals, but the companies expect it to close later thus year.

Midlothian-based Chaparral is the second largest producer of structural steel beams in North America, a major supplier of steel bar products and a leading North American recycling company.

Toronto-based Gerdau Ameristeel has steel production operations in Chatham and Whitby, Ontario, and Selkirk, Manitoba. It is also a major steel recycler with locations in the U.S. and in Ontario cities such as Cornall, Whitby, London, Toronto and Oshawa. It has executive offices in Tampa, Fla.

Tommy A. Valenta, president and chief executive of Chaparral, said the deal creates significant value for its shareholders and allows Chaparral to become part of “one of the largest and most respected steel companies in the world.”

Chaparral, which has about 1,400 employees and annual capacity of 2.9 million metric tons, makes structural steel and steel bar products. It operates a mill in Midlothian and in Dinwiddie County in Virginia.

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