BlueScope Steel Ltd., Australia's largest steelmaker, agreed to buy four U.S. building material businesses for $730 million, betting commercial construction demand will defy a worsening homebuilding slump.
The acquisition will boost earnings from 2009, BlueScope said today in a statement. The Melbourne-based company bought the businesses from Luxembourg-based Ternium SA to become North America's second-biggest supplier of ready-to-assemble buildings used as schools, barns and aircraft hangers.
The purchase will double BlueScope's sales in the $157 billion U.S. commercial and industrial building market, adding 23 plants from California to North Carolina. The U.S. economy grew at the fastest annual rate in four years in the third quarter as commercial construction increased, tempering a drop in housing.
``You have to be big to be efficient, successful and the leader in the market and that's what they are trying to do,'' Lucinda Chan, head of Asian business at Macquarie Equities Ltd. in Sydney, said by phone. ``North America is in a lot of trouble at the moment and obviously they are expecting a turnaround.''
BlueScope rose 26 cents, or 2.9 percent, to A$9.26 ($7.94) the 4:10 p.m. Sydney time on the Australian Stock Exchange. The stock has risen 7.4 percent this year.
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