Seven Group Holdings (SGH), in partnership with US company Steel Dynamics, has made a $13.2 billion bid to acquire Australian steelmaker BlueScope Steel. The offer, priced at $30 per share, involves SGH retaining BlueScope's Australian assets while Steel Dynamics would acquire its North American operations. BlueScope's board and its largest shareholder, AustralianSuper, have reportedly rejected the offer, which is contingent on several factors including due diligence and regulatory approvals.
Acquisition Proposal for BlueScope Steel
Seven Group Holdings (SGH), an industrial group controlled by Kerry Stokes, has submitted a $13.2 billion takeover bid for BlueScope Steel, an Australian steelmaker. The proposal, made in partnership with US-based Steel Dynamics, offers $30 per share.
Under the terms of the bid, SGH intends to acquire BlueScope's Australian assets, while Steel Dynamics would purchase its North American flat rolled and coated steel operations. Steel Dynamics, recognized as the fourth-largest steel producer in the United States, has previously expressed interest in BlueScope's US business.
Background and Previous Bids
This current offer marks Steel Dynamics' third attempt in two years to acquire BlueScope's North American assets. BlueScope's board and management confirmed they are evaluating the current offer. However, BlueScope and its largest shareholder, AustralianSuper, have reportedly rejected the proposal. The company previously rejected three prior bids involving Steel Dynamics, citing concerns that these offers "significantly undervalued BlueScope and its future prospects, and presented significant execution risk in relation to regulatory outcomes."
Previous offers included:
- Late 2024: A Steel Dynamics-led consortium made two cash offers, initially $27.50, then increased to $29 per share.
- Early 2025: Steel Dynamics proposed an offer to acquire the North American assets and distribute remaining assets to existing BlueScope shareholders. This offer valued the company at $31 per share ($24 for North American assets, $9 for other assets).
The current $30 per share offer represents the highest valuation proposed to date, exceeding target prices set by most analysts, which ranged between $24 and $26 according to Bloomberg data.
Market Reaction and SGH's Strategic Rationale
Following the announcement, BlueScope shares experienced an increase of over 20% to $29.51 by 11:45 AM AEDT on Tuesday, nearing the proposed offer price. Shares in SGH also increased by approximately 4.9%.
SGH Chief Executive Ryan Stokes stated that BlueScope's Australian business aligns strategically with SGH's existing portfolio. SGH's industrial operations include Australia's largest construction materials supplier, Boral (acquired by SGH in 2024), Caterpillar dealer Westrac, industrial hire group Coates, a 30% stake in Beach Energy, and a 40% stake in media company Seven West. Mr. Stokes commented on SGH's "proven track record of driving performance improvement in domestic industrial businesses."
The current offer is contingent upon conditions, including due diligence, regulatory approvals, and the consortium's ability to secure financing for the transaction. Reports indicate the proposal is significantly reliant on debt financing. Kerry Stokes is the primary shareholder of SGH, an industrial group whose operations contribute to an estimated $13 billion personal fortune, associated with growth in Australia’s mining and infrastructure sectors.