Kerry Stokes-controlled investment group SGH Ltd (ASX: SGH) has set the pace for takeover activity in 2026 with a $13.2 billion bid for steel manufacturer BlueScope Steel (ASX: BSL), confirming it has partnered with US-headquartered Steel Dynamics, Inc. for one of the biggest takeover deals in Australia over the past year.
The offer is priced at $30 per BlueScope share, or a 22.7 per cent premium to the company’s previous closing price of $24.45.
Shares in BlueScope surged almost 20 per cent to a high of $29.22 this morning following the announcement.
Backed by Steel Dynamics, the fourth-largest steel producer in the US with a market valuation of $38.5 billion, SGH says BlueScope Steel will “benefit as stand-alone businesses under new ownership” while delivering a “compelling value proposition” for shareholders.
Steel Dynamics is also largest metals recycler and the second-largest producer of steel joist and deck in North America.
“We believe the acquisition of BlueScope’s North American Assets will be highly complementary to our existing operations and further expands our capabilities domestically,” says Mark Millett, the co-founder, chairman and CEO of Steel Dynamics Inc (SDI).
“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.”
SGH, which is controlled by the Stokes family, has a diversified portfolio of assets including equipment hire business Coates and Cat equipment dealer WesTrac, as well as substantial shareholdings in Beach Energy (ASX: BPT) and Seven West Media (ASX: SWM).
The company also completed a full takeover of building products group Boral in 2024 by paying about $2 billion for the shares it did not already own.
“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,” says Ryan Stokes, the CEO of SGH.
“We intend to leverage our disciplined operating model and capital allocation approach to deliver better outcomes for stakeholders.”
SGH and Steel Dynamics plan to fund the acquisition from existing cash reserves and debt financing, with the companies noting that they will not need to raise capital to complete the deal.
The takeover partners say the buyout proposal is based on “a thorough assessment of publicly available information on BSL”.
“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,” they say.
“SGH and SDI look forward to engaging with BSL to progress the proposal and have committed substantial resources to conduct confirmatory due diligence.”
The proposed $13 billion BlueScope takeover compares with a $14 billion merger completed in July last year by James Hardie Industries (ASX: JHX) with US decking group Azek.
While the proposed takeover of BlueScope Steel pales in comparison with the $30 billion takeover bid proposed for Santos (ASX: STO) last year by a consortium led by Abu Dhabi National Oil Company, that deal did not proceed.
Shares in BlueScope Steel were trading at $29.16 at 10.41am (AEDT) while SGH shares were up $2.40 to $48.89.
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