Exhibit 99.2

NOTICE TO SHAREHOLDERS

PAYMENT OF DIVIDENDS

We would like to inform our Shareholders that the Boards of the companies listed below, in meetings held on February 8^th, 2006, deliberated about the proposals presented by management with regards to the payment of dividends for the forth quarter of the fiscal year ended on December 31^st, 2005. The amounts will be calculated and paid based on the position held by shareholders on February 17^th, 2006. The payment date will be March 2^nd, 2006, and constitute an anticipation of the annual minimum dividend, as stated in the by-laws, as follows:

Company	Amount per share Common and Preferred Shares
MetalÚrgica Gerdau S.A.	R$ 0.69
Gerdau S.A.	R$ 0.42

Please note that shares acquired on February 20^th, 2006, and thereafter, will be traded EX-DIVIDEND.

Additional information can be obtained at our Shareholders Department, located at

Av. Farrapos 1811, 90220-005 Porto Alegre / RS – Brazil

Phone: +55 (51) 3323.2211 – Fax: +55 (51) 3323.2281

E-mail acionistas@gerdau.com.br

Porto Alegre, February 8^th, 2006.

Osvaldo Burgos Schirmer

Vice President

Investor Relations Director