Filer: Gerdau AmeriSteel Corporation

Pursuant to Rule 425 under the Securities Act of 1933

Subject Company: AmeriSteel Corporation

Commission File No. 001-05210

CO-STEEL AND GERDAU S.A. ANNOUNCE AGREEMENT TO COMBINE NORTH
AMERICAN STEEL OPERATIONS

Toronto, Ontario, August 13, 2002 - Co-Steel Inc. of Whitby, Ontario, (TSX:CEI), and Gerdau S.A. of Rio de Janeiro, Brazil (NYSE:GGB) today announced the execution of a definitive agreement to combine their North American steel operations creating a world-class steel enterprise with anticipated annual revenue in excess of $2.5 billion (US $1.7 billion). The transaction will combine complementary operating portfolios resulting in an enhanced product mix and a sound growth platform for the North American steel industry. All figures are in Canadian dollars unless otherwise stated.

Under the terms of the transaction agreement, Co-Steel will issue 146,588,194 common shares to acquire Gerdau S.A.s affiliated steel holdings including Gerdau Courtice Steel, based in Cambridge, Ontario, Canada, Gerdau MRM Steel, based in Selkirk, Manitoba, Canada and AmeriSteel, based in Tampa, Florida, USA. Upon closing of the transaction, Co-Steel will be renamed Gerdau AmeriSteel Corporation and will have approximately 198 million common shares outstanding. The existing Co-Steel shareholders will own 26% of the outstanding shares of Gerdau AmeriSteel, with Gerdau S.A. and its affiliated shareholders owning 74%. There will be no change in the status of the outstanding Co-Steel convertible debentures. Subject to Toronto Stock Exchange approval, the common shares of Gerdau AmeriSteel will trade on the TSX.

This combination is a defining moment that opens an exciting future for the employees, customers and shareholders of both companies, said Terry Newman, President and CEO of Co-Steel. The combined strengths and compatible cultures of these companies provide the nucleus for realization of a shared vision of a world-class steel enterprise that can compete in todays global market. This transaction creates the financial resources, the operational critical mass and the professional talent pool needed to contribute to the revitalization of the North American steel industry.

Through a combined network of 11 mills with annual manufacturing capacity in excess of 6.8 million tons of finished steel products, Gerdau AmeriSteel will be able to strategically service long product customers throughout eastern North America, resulting in improved operating efficiencies. Gerdau AmeriSteels minimills will be integrated with 29 downstream fabricating and specialty product businesses, increasing profit margins and reducing the volatility of earnings.

Gerdau AmeriSteel expects to realize a number of economic benefits as a result of the combination:

		The company expects to realize approximately $35 million ($23 million USD) in near-term annual cost savings, without any significant capital expense, through freight rationalization, product and mill scheduling efficiencies, and enhanced purchasing volume;
		Additional incremental cost savings will be realized through the adoption of best operating practices and coordination of manufacturing technologies; and
		The company does not anticipate any significant restructuring of the operating units or any material manpower reductions among the current combined 4,800 employees.

Co-Steel shareholders will benefit from the combined entitys strengthened balance sheet and improved financial outlook. In particular:

		Co-Steels net debt/EBITDA (adjusted for non-recurring items) for the 12 months ending June 30, 2002, will improve from 8.1x to 3.8x on a pro forma basis based on Gerdau AmeriSteels pro forma net debt and annualized EBITDA for the six months ending June 30, 2002;
		EBITDA for Co-Steel for the six month period ending June 30, 2002, was $44 million, while pro forma EBITDA for Gerdau AmeriSteel for the same period amounted to $134 million;
		The transaction will be accretive to Co-Steels earnings and cash flow on a pro forma basis and going forward; and
		Gerdau AmeriSteel will have a significant component of its production in more profitable downstream and specialty products resulting in improved profit margins and greater earnings stability.

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Gerdau AmeriSteels board of directors will be composed of nine members. Four current Co-Steel directors will remain on the Board with Gerdau S.A. appointing five new members. Jorge Gerdau Johannpeter, Chairman of Gerdau S.A., will be the Chairman of the Board of Directors of Gerdau AmeriSteel. Terry Newman, President and CEO of Co-Steel, will serve as Vice Chairman of the Board of Directors. Phillip E. Casey, currently President and CEO of AmeriSteel, will be the President and CEO. The new Board is committed to taking whatever steps may be required to ensure compliance with current and evolving North American corporate governance standards. Gerdau AmeriSteel Corporation will have its registered office in Whitby, Ontario, Canada and its executive office will be located in Tampa, Florida, USA.

Jorge Gerdau Johannpeter, Chairman of Gerdau S.A., commented: This transaction coincides with a period of heightened economic uncertainty and trade conflict for the global steel industry. Gerdau and Co-Steel have crafted an attractive transaction that is financially sound and creates an enterprise that possesses the professional resources to lead the resurgence of the North American steel industry. For Gerdau S.A., this merger represents an important step in the unification of its holdings and a substantial increase in the companys commitment to the attractive North American market. The unification of two quality organizations with comparable traditions and corporate images is an exciting event and a positive step towards a brighter future.

The transaction, which will be accounted for as a reverse take-over, is scheduled to close during the fourth quarter 2002, and is subject to closing conditions typical of a transaction of this nature, including shareholder, lender and regulatory approvals. Details of the transaction will be provided in a management information circular to be issued by Co-Steel in connection with a special meeting of its shareholders expected to be held in late September 2002. The materials will also contain a fairness opinion by CIBC World Markets.

The agreement contains customary non-solicitation restrictions and certain provisions permitting CoSteel directors to discharge their fiduciary duty. Co-Steel has also agreed to pay a termination fee of $8 million (in cash or shares, at the election of Co-Steel) in certain circumstances. The parties are conducting physical due diligence of the others assets over the next ten days to confirm the accuracy of the other partys representations in the transaction agreement. Either party may terminate the agreement if such investigation reveals a material inaccuracy that is not cured within 30 days.

The Board of Directors of Co-Steel has unanimously approved the transaction and will recommend that shareholders vote in favour thereof.

A conference call and webcast presentation concerning todays merger announcement will be conducted by management in both English and Portuguese as follows:
 

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