FOLLOW US

BlueScope Steel said Monday it is weighing a sweeping takeover approach that could reshape its global footprint, confirming it is reviewing a 13.2 billion Australian dollar ($8.8 billion) proposal led by SGH Ltd. alongside U.S.-based Steel Dynamics Inc.

The Australian steelmaker said it is working closely with Herbert Smith Freehills Kramer LLP as it examines the unsolicited offer, which landed just before the year-end holiday lull but has already sent ripples through the steel sector.

Details of the Unsolicited Offer

BlueScope disclosed that it received a nonbinding, unsolicited proposal on Dec. 12 from an Australian-U.S. consortium to acquire all outstanding BlueScope shares for AU$30 in cash per share, structured through a scheme of arrangement.

Under the plan, SGH would acquire full ownership of BlueScope, before divesting the company’s North American operations to Steel Dynamics, effectively splitting the business along geographic lines.

Conditions Attached to the Deal

The steelmaker emphasized that the proposal comes with a long list of conditions. These include:

• Exclusivity arrangements

• Completion of due diligence

• Regulatory approvals

• Debt funding support

• A unanimous recommendation from BlueScope’s board

• Approval by shareholders

BlueScope said its board, management, and advisers are carefully assessing whether the offer stacks up against the company’s underlying value.

How BlueScope Is Valuing the Bid

In evaluating the proposal, BlueScope said it will weigh several core factors, including:

• The strength of its asset base

• Expected cash flow growth as major capital projects near completion

• A AU$2.3 billion investment program aimed at delivering AU$500 million in additional annual earnings by 2030

• The strategic value of its landholdings

The company signaled that these fundamentals form the backbone of its long-term outlook and will be central to any decision.

History of Rejected Bids

BlueScope noted that this is not the first time suitors have come calling. The board previously rejected three unsolicited approaches, including:

• Two offers in late 2024 from a different Steel Dynamics-led consortium at AU$27.50 and AU$29 per share

• A separate proposal in early 2025 that BlueScope said significantly undervalued the business and carried execution risk

Those rejections underscore the board’s caution as it confronts the latest, higher-priced bid.

What Shareholders Should Know

For now, BlueScope stressed that shareholders do not need to take any action. The review process is ongoing, and no decision has been made.

In addition to legal counsel from HSF Kramer, BlueScope said it has appointed UBS as its financial adviser as it navigates the proposal.