SGH and Steel Dynamics announced they have submitted a non-binding indicative offer to acquire 100% of BlueScope Steel in an all-cash deal valued at A$30 per share, as the parties pursue a split of BlueScope’s Australian and North American operations.
Under the proposal, SGH would acquire BlueScope via a scheme of arrangement. Following completion, SGH would on-sell BlueScope’s North American operations to Steel Dynamics, including the North Star flat-rolled steel mill and BlueScope’s Building and Coated Products North America businesses. SGH would retain BlueScope’s Australia and “rest of world” operations, including Australian Steel Products, Asia Coated Products, and the New Zealand and Pacific Islands businesses.
The offer implies a total equity value of about A$13.2 billion. SGH and Steel Dynamics said the A$30.00 per share price represents a 27% premium to BlueScope’s closing share price at the time of the offer’s submission, along with premiums of roughly 33% to the company’s three-month and 52-week volume-weighted average prices. The proposed consideration is also pitched as a premium to the company’s 15-year high share price, and is presented at 18.6x EV to FY25A EBIT and 9.5x EV to FY25A EBITDA based on BlueScope’s FY25 annual results.
SGH and Steel Dynamics said they do not expect material obstacles to obtaining customary regulatory approvals for a transaction of this nature. The companies also said they have entered into a 12-month exclusivity agreement with each other and have committed resources to advance the process. As is typical for proposals of this type, they said the offer price would be reduced by the amount of any cash dividends paid after Dec. 12, 2025, the submission date for the indicative offer.
The proposal remains subject to confirmatory due diligence, negotiation of a binding scheme implementation deed, and shareholder and regulatory approvals. The parties emphasized that there is no certainty that the approach will lead to a transaction.
In outlining the rationale, SGH and Steel Dynamics said BlueScope’s North American and Australia-plus-rest-of-world businesses are not strategically compatible under one umbrella and would be better positioned as standalone operations with owners aligned to their respective geographies. SGH, an Australian diversified industrial services and energy-focused operating business, said BlueScope’s Australian operations fit its capital allocation criteria and operating model. Steel Dynamics, which described itself as the largest metals recycler and among the largest steel producers in North America, said BlueScope’s North American assets would complement its steel, fabrication, and recycling platforms.
The companies also said SGH intends to offer one, potentially two, board seats to current BlueScope directors to support continuity and knowledge transfer, and that both SGH and Steel Dynamics intend to retain key BlueScope management in their respective regions post-transaction. Funding would come from existing cash and available debt financing, with no equity raise contemplated.
Support: SGH named Barrenjoey and Goldman Sachs as financial advisors and Allens as legal advisor, while Steel Dynamics named JP Morgan as financial advisor, Ashurst as Australian legal advisor, and Skadden, Arps, Slate, Meagher & Flom and Barrett McNagny as U.S. legal advisors.
KEY QUOTES:
“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.”
Ryan Stokes, Managing Director and Chief Executive Officer, SGH Ltd
“We believe the acquisition of BlueScope’s North American Assets will be highly complementary to our existing operations and further expands our capabilities domestically. The combination of BSL’s North American teams and assets with SDI would be an excellent fit in every sense and create value for all stakeholders.”
Mark Millett, Co-Founder, Chairman, and Chief Executive Officer, Steel Dynamics, Inc.
