Kerry Stokes and Steel Dynamics Propose $9 Billion Acquisition of BlueScope

BlueScope Steel, Australia’s largest steel producer, is in the spotlight again due to a substantial $9 billion takeover bid. This offer comes from Australian media magnate Kerry Stokes through his company SGH, in partnership with U.S.-based Steel Dynamics.

The proposed price stands at approximately A$30 per share in cash, effectively valuing BlueScope at nearly $9 billion. The news triggered a dramatic increase in BlueScope’s share prices, which soared over 20%, approaching the suggested offer.

Kerry Stokes is renowned for establishing a media empire centered around Australia’s Seven Network. Over the years, his business interests have expanded to encompass energy, heavy machinery, and construction materials. Notably, in 2024, SGH acquired Boral, a significant move into industrial sectors.

If this deal is finalized, SGH would enhance its standing in the industrial sphere. The acquisition plan involves regional segmentation: SGH would oversee operations in Australia while Steel Dynamics would manage the North American segment.

Based in Indiana, Steel Dynamics operates steel production plants in the U.S., including one adjacent to BlueScope’s Ohio facility, making this partnership strategically appealing. Leadership from Steel Dynamics indicated this acquisition would seamlessly integrate into their current U.S. operations and boost local capabilities.

BlueScope has acknowledged that it is reviewing this latest offer. Interestingly, the company had previously declined three earlier offers associated with Steel Dynamics. One such prior proposal was not much lower than the current bid, illustrating a sustained interest in acquiring the steelmaker.

For stakeholders, this offer arrives amidst a backdrop of pressured profits for BlueScope. Sluggish demand has prompted customers to postpone orders due to uncertainties surrounding global trade and tariffs implemented by U.S. President Donald Trump. BlueScope maintains that its direct exposure to these tariffs is limited; however, broader market uncertainties have impacted overall sentiment.

Market analysts generally favor the proposal yet suggest that an increase in the bid might be necessary for BlueScope to seriously consider it. While some experts believe the deal could unlock shareholder value, they caution that the execution could be intricate. They also emphasize potential uncertainties for employees and suppliers during the transition.

The prospective buyers have ensured that, should the acquisition be completed, the management team at BlueScope will remain, while Steel Dynamics will retain its leaders in North America. Detailed plans regarding long-term job security, however, have not yet been revealed.

As per Australian takeover regulations, the bidders have requested exclusive access to BlueScope's financial information for a set duration. BlueScope has yet to disclose its decision regarding this request.

The ongoing discussions around this takeover have become one of the most widely discussed corporate maneuvers in Australia. The outcome hinges on negotiations occurring in the approaching weeks.