Australia's SGH Ltd has confirmed it has submitted a non-binding indicative offer (NBIO) of A$13.2 billion with US steelmaker Steel Dynamics, Inc. to acquire 100 per cent of Australian steel producer BlueScope Steel Ltd through a scheme of arrangement.
Under the proposed structure, SGH will fully acquire BlueScope Steel. Upon completion of the transaction, SGH will sell BlueScope's North American operations to Steel Dynamics.
Post-Acquisition Asset Separation Structure
The North American assets included in the transaction include the North Star flat steel mill and BlueScope's construction and coatings products businesses. SGH will retain ownership of BlueScope's remaining operations, including steel products in Australia, coated products in Asia and the New Zealand and Pacific Islands operations.
SGH and Steel Dynamics said BlueScope's business segments will operate more efficiently under separate ownership structures. From SGH's perspective, BlueScope's Australia-focused activities are closely aligned with its existing industrial services and energy portfolio. At the same time, Steel Dynamics views BlueScope's North American assets as highly complementary to its existing steel fabrication, fabrication and metals processing platform.
On the financing side, both SGH and Steel Dynamics have indicated that they plan to finance their respective portions of the transaction using existing cash reserves and available debt facilities.
