The Kerry Stokes-led SGH (ASX: SGH) and US-based Steel Dynamics (SDI) have lodged a $13.15 billion takeover offer for Australia's largest steel producer, BlueScope Steel (ASX: BSL).
Under the non-binding indicative offer (NBIO), the consortium is looking to acquire 100% of BlueScope by way of a scheme of arrangement.
If that proposal is implemented and the transaction successfully closed, SGH plans to sell-on BlueScope’s North American operations to SDI, which include BlueScope's North Star flat rolled steel mill and building and coated products businesses.
SGH would retain the remaining BlueScope “Australia + Rest of World” operations, including Australian steel products, Asian coated products, and New Zealand and Pacific Islands businesses.
Previous bid knockbacks
The new bid comes after Steel Dynamics had made several earlier proposals to acquire the BlueScope business.
The BlueScope board confirmed that it had previously considered and unanimously rejected three separate unsolicited approaches. In late 2024, a different Steel Dynamics-led consortium offered $27.50 and then $29.00 per share for all of BlueScope. In both proposals, Steel Dynamics would have acquired BlueScope’s North American operations.
SGH told the ASX the latest proposal to acquire BlueScope's shares for a wholly cash consideration of $30.00 per share represented a compelling value proposition and highly attractive premium for BlueScope shareholders including being a 27% premium to closing share price at the submission of the NBIO.
Strong strategic fit
“We believe BlueScope’s Australian business is a strong strategic fit for SGH and we have a proven track record of driving performance improvement in domestic industrial businesses. We intend to leverage our disciplined operating model and capital allocation approach to deliver better outcomes for stakeholders," SGH managing director and chief executive officer, Ryan Stokes, said.
SGH and Steel Dynamics told the stockmarket the proposal provides BlueScope shareholders with an immediate, certain opportunity to realise a material uplift in value.
The takeover proposal is now subject to a number of conditions including various board, shareholder and regulatory approvals.
BlueScope has appointed UBS as financial advisor and Herbert Smith Freehills Kramer as legal adviser.
