On 6 August 2026, Gerdau S.A. (NYSE: GGB) closed its purchase of the 23.03% stake in Dona Francisca Energetica S.A. held by Companhia Paranaense de Energia, the second of two deals that bring the Brazilian steelmaker to full ownership of a hydroelectric generator on the Jacui River. Vice president and investor relations officer Rafael Dorneles Japur signed the market notice, issued in Sao Paulo. Gerdau’s shares also trade on B3 under the code GGBR.
The closing terms
Closing followed satisfaction of the conditions precedent, among them clearance from Brazil’s antitrust authority. Gerdau valued the acquisition at R$150 million and, adding a proportional consolidated cash balance of R$719,205.75, arrived at a total cash outlay of R$150,719,205.75, funded from its own resources. The company framed the purchase as consistent with its capital allocation discipline, as adding to cost competitiveness through greater renewable self production, and as aligned with a decarbonisation strategy it had already disclosed.
The August notice pointed back to one from 15 June 2026, when Gerdau signed the share purchase agreement with Copel at an enterprise value of R$150 million. That same agreement had Copel waive its right of first refusal over a separate stake, a detail that matters because this was the second half of a two-step transaction.
What Gerdau bought, in energy terms
The June notice described the asset itself. Dona Francisca Energetica is a privately held generator holding an 85% interest in the concession consortium for the Dona Francisca Hydroelectric Power Plant, on the Jacui River in Rio Grande do Sul, between the municipalities of Agudo and Nova Palma. The plant runs 125 MW of installed capacity and 72.5 average MW of firm energy, of which roughly 66 average MW is allocated to the generator.
Before these two purchases, Gerdau held 53.94% of the share capital, equal to 35.6 average MW of energy. Having now completed the acquisitions from both Centrais Eletricas de Santa Catarina and Copel, it owns 100% of the share capital, for a combined R$300 million in enterprise value, adding 30.4 average MW of self production capacity and putting the full 65.94 average MW of firm energy at its disposal. Gerdau says this pushes self generation above 50% of its energy consumption.
The first of the two steps came earlier. On 16 April 2026, Gerdau said Celesc had accepted its binding proposal for an identical 23.03% stake, also at an enterprise value of R$150 million, subject to other shareholders’ proportional preemptive rights and to antitrust clearance. Gerdau’s condensed consolidated interim financial statements as of 30 June 2026 record that deal as completed at the same R$150 million enterprise value and, with roughly R$4 million of proportional consolidated cash added in, a total cash outlay of about R$154 million. The same note says that acquiring the full equity interest amounts to acquiring control, and that the accounting impact of the business combination was still under assessment as of that date.
Gerdau reported cash and cash equivalents of R$5,155,232 thousand at 30 June 2026, down from R$5,929,170 thousand at 31 December 2025. Separately, on 31 August 2026, the company and several affiliates signed a senior unsecured global working capital credit agreement for US$1,125,000,000, replacing a fully available, undrawn US$875,000,000 facility, a roughly 29% increase in total availability, running five years from execution. The central bank’s PTAX selling rate closed that day, 31 August 2026, at 5.1816 to the dollar.
Analysis: two identical stakes at the same disclosed price
Both purchases are the same size and carry the same price tag. Celesc’s 23.03% and Copel’s 23.03% each went for an enterprise value of R$150 million, four months apart, and it was the second of the two that carried Gerdau from a 53.94% majority to full ownership. The two blocks priced identically, so the disclosures record no separate amount for the block that carried Gerdau from a majority holding to full ownership. The June agreement also records that Copel waived its right of first refusal over the Celesc stake in the same instrument by which it sold its own holding. After that waiver, what Copel held was a minority position in a company whose majority shareholder was also a customer for its power.
The cash top-up shows how minor the working-capital piece is next to the headline number. Gerdau reported R$719,205.75 of proportional consolidated cash on the Copel closing and about R$4 million on the Celesc closing. Both were paid out of existing resources, and R$300 million of combined enterprise value set against cash and cash equivalents of R$5,155,232 thousand at quarter-end is not, in itself, a financing event. The credit agreement signed at the end of August, lifting undrawn availability from US$875,000,000 to US$1,125,000,000, is a separate and much larger liquidity move, and there is nothing to suggest it funds this purchase.
What Gerdau has actually acquired is the gap between 35.6 and 65.94 average MW of firm energy, 30.4 average MW it will now consume rather than sell on. Producing its own power strips out the distribution and trading margins embedded in what a steelmaker otherwise pays for that share of its load, and locks in the cost for as long as the concession runs, rather than leaving it exposed to future contract renewals. Pushing self generation above 50% of consumption changes how roughly half the company’s electricity cost behaves, rather than producing a one-time saving. The notices link the deal to both the decarbonisation strategy and cost competitiveness.
Three gaps in the disclosures are worth flagging. None of the notices states the concession term for the Dona Francisca plant, which caps the value of what was bought. The accounting is also unresolved: the interim statements note the business combination’s impact was still being assessed, so consolidating a company Gerdau previously held at 53.94% will show up in a later reporting period. And nowhere does Gerdau put a number, in reais or in cost per tonne, on the saving relative to what it would otherwise have paid for that 30.4 average MW.
Worth checking as they arrive: the business combination note in the next set of quarterly statements, which should carry the fair value allocation and the effect of consolidating the generator, and the energy cost line within the steel business as the added self production comes online at the plants.
