Republic Announces Purchase Agreement with Industrias CH
Transaction Would Preserve Capital Investment Program, Stengthen Ties to Customers Expanding in Mexico, S. America

FAIRLAWN, Ohio (July 22, 2005) -- Republic Engineered Products, Inc., North America's largest producer of special bar quality (SBQ) steel, today announced an agreement by which its business would be acquired by Industrias CH, S.A. de C.V. (ICH), a rapidly growing steel producer and processor based in Mexico City.

Under the agreement, ICH would acquire Republic in a stock purchase of all shares, including those owned by the majority shareholder, Perry Capital, New York. Republic would become a subsidiary of Grupo Simec, Guadalajara, Mexico, of which ICH is the majority owner.

Terms of the agreement were not disclosed. Kirkland and Ellis was legal advisor, and UBS Securities LLC acted as financial advisor to Republic.

“This combination will create an international strategic alliance,” said Joseph F. Lapinsky, Republic’s president and chief executive officer. “Republic will continue to operate as a stand-alone business but will have a very strong resource in Mexico as we strengthen our relationships with customers expanding in Mexico and South America.

“This transaction will preserve our ability to continue our capital investment program. ICH intends to put Republic in a debt-free position by the end of 2006. The previously announced installation of the new caster at our Canton plant remains on schedule, and additional capital investments will be considered after that project is complete.”

Sergio Vigil, director and chief financial officer of ICH, added, “The addition of Republic to our family of companies will give us a presence in the United States for the first time. Republic has a bright future, and our commitment to the business will make it even stronger. Republic also will be a valuable resource as we pursue additional U.S. business for our other lines of steel products.”

Perry Capital had purchased Republic’s assets in December 2003. A registration statement was filed in November 2004 to sell a portion of Republic in an initial public stock offering. The opportunity to sell Republic to ICH presented itself during the registration process.

ICH operates four electric furnace steelmaking centers and four processing plants, focusing on specialty steel long products, welded pipe, structurals and rebar. Customers include auto parts makers, oil and gas companies, industrial equipment builders, construction materials suppliers and steel distributors. ICH employs about 3,300 people and has steelmaking capacity of approximately 1.9 million tons.

ICH has grown rapidly through acquisitions. Most recently, it purchased Grupo Simec in 2001 and the Mexican steel assets of Corporacion Sidenor (Spain) in 2004. For more information on ICH, its website is www.industriasch.com.mx.

ICH stock is traded on the Mexico Stock Exchange under the symbol ICHB. Grupo Simec is traded on the American Stock Exchange under the symbol SIM.

Republic is North America’s leading supplier of special bar quality (SBQ) steel, a highly engineered product used in axles, drive trains, suspensions and other critical components of automobiles, off-highway vehicles and industrial equipment. With headquarters in Fairlawn, Ohio, Republic operates steelmaking centers in Canton and Lorain, Ohio, and value-added rolling and finishing facilities in Canton, Lorain and Massillon, Ohio; Lackawanna, New York; Gary, Indiana; and Hamilton, Ontario. Republic employs approximately 2,500 people and has steelmaking capacity of 2.3 million tons.

Published on 2005-07-22

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