Standard&Poor's Ratings Services' ratings on Gerdau S.A. reflect the company's adequate geographic diversification through the Americas and an expanding specialty steel business, with very strong and growing market shares in Brazil and North America, respectively; the improved business profile of its North American operation; and our expectation that the company will follow a conservative acquisition policy in the medium term so that its capital structure does not deteriorate. These positives are partly offset by Gerdau's increased financial leverage after acquisitions; exposure to the cyclical commodity long steel industry, which has become more uncertain and volatile given the worsening of global economic conditions; an acquisitive growth strategy; and a still sizable capital budget. Gerdau's business position is satisfactory. The
