In response to media speculation, SGH Ltd. confirms it has submitted a non-binding indicative offer, together with Steel Dynamics Inc., for SGH to acquire 100 percent of BlueScope Steel Ltd. If the Proposal is implemented and following the transaction close, SGH would on-sell BlueScope's North American operations to SDI, which include its North Star flat-rolled steel mill and the Building and Coated Products North America businesses. SGH would retain the remaining Bluescope Australia and Rest of World operations.
Compelling opportunity to realise a material uplift in value
The proposal provides BLuescope shareholders with an immediate, certain opportunity to realise a material uplift in value. The Proposal to acquire Bluescope's shares for a wholly cash consideration of AUD $30 (U.S. $20.04) per share represents a compelling value proposition and highly attractive premium for Bluescope shareholders, being:
- 27 percent premium to Bluescope closing share price as at the submission of the offer;
- 33 percent premium to Bluescope's 3-month volume-weighted average share price;
- 33 percent premium to Bluescope's 52-week volume-weighted average share price;
- 15 percent premium to Bluescope's 15-year high share price; and
- 18.6x EV / FY25A EBIT and 9.5x EV / FY25A EBITDA.
The consideration represents a total equity value for Bluescope of AUD $13.2 billion (U.S. $8.8 billion). SGH and SDI do not envisage any material obstacles in obtaining the relevant regulatory approvals required, which are customary for an acquisition of this nature. SGH and SDI have also entered into a 12-month exclusivity agreement with each other and have committed significant resources to progress this transaction. In line with transactions of this nature, the Proposal price will be reduced by the quantum of any cash dividends paid by Bluescope to its shareholders after Dec. 12, 2025.
The proposal is subject to customary conditions, including completion of satisfactory due diligence, agreement of a binding scheme implementation deed, and receipt of relevant shareholder and regulatory approvals. SGH and SDI note there is no certainty that the Proposal will result in a transaction.
Transaction rationale
SGH and SDI believe that Bluescope's independent enterprises in Australia and Rest of World and North America are not strategically compatible and would benefit as stand-alone businesses under new ownership. The proposed acquisition would deliver compelling value for Bluescope's shareholders, and benefits Bluescope's other stakeholders, including employees and local communities. Bluescope's North American businesses strongly complement SDI's existing steel, steel fabrication, and metals recycling operating platforms.
Mark Millett, co-founder, chairman and CEO of Steel Dynamics says: "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 Bluescope's North American teams and assets with SDI would be an excellent fit in every sense and create value for all stakeholders."
Next steps
The proposal is based on a thorough assessment of publicly available information on Bluescope. In forming this proposal, SDI has drawn on its extensive knowledge of and experience in the global steel industry and SGH has drawn on its Australian industrial operational experience, knowledge and execution capabilities. SGH and SDI will proceed with confirmatory due diligence.
