Steel Dynamics' A$13.2B Bid for BlueScope Assets Hits Roadblock
Australian steelmaker's board unanimously rejects joint takeover offer from a consortium including Steel Dynamics, citing significant undervaluation.
Steel Dynamics’ ambitious push to acquire a key North American steel asset has been thwarted after the board of Australia’s BlueScope Steel unanimously rejected an A$13.2 billion (US$8.8 billion) unsolicited takeover proposal from a consortium that includes the U.S.-based steel producer.
The offer, made jointly by Steel Dynamics (STLD) and Australian conglomerate SGH, was dismissed for significantly undervaluing the company, BlueScope announced this week. The rejection marks a notable setback in Steel Dynamics' strategy to expand its domestic manufacturing footprint and raises questions about the path forward for one of the largest steel producers in the United States.
Under the terms of the complex proposal, the consortium would have acquired all of BlueScope's shares, with Steel Dynamics then purchasing BlueScope's prized North American assets from the partnership. These assets are centered around the highly efficient North Star steel mill in Delta, Ohio, a facility located near existing Steel Dynamics operations and one that would be, according to a statement from the bidders, "highly complementary" to its current portfolio.
The bidders argued that BlueScope's Australian and North American businesses were "not strategically compatible" and would generate more value as separate entities. The North American operations are a significant driver of BlueScope's performance, accounting for roughly 45% of its revenue in the 2025 financial year.
However, BlueScope’s board was resolute in its refusal, marking this as the fourth unsolicited offer it has turned down from the bidding group. The board stated the A$30-per-share cash offer not only failed to reflect the company's intrinsic value but also presented considerable execution, funding, and regulatory risks. In its defense, the Australian firm pointed to its “strong asset portfolio, anticipated increase in cash flow, and an A$2.3 billion investment committed to sustainable earnings growth,” as reported by several news outlets.
Investors appeared to back the board's assessment. Following the news, BlueScope's shares surged more than 20% in trading on the Australian stock exchange, closing the session just shy of the A$30 offer price—a clear signal from the market that a higher premium would be required for any deal to proceed. Analysts and portfolio managers echoed this sentiment, with some suggesting a price north of A$30 would be necessary to bring BlueScope to the negotiating table.
For Fort Wayne, Indiana-based Steel Dynamics, the rejected bid casts a shadow of uncertainty over its expansion plans. The company, which boasts a market capitalization of over $25 billion and revenue of $17.6 billion in the last twelve months, is trading near its 52-week high, reflecting strong operational performance and investor confidence. The pursuit of BlueScope's Ohio mill represented a strategic move to consolidate its position in the U.S. market and leverage geographical synergies.
The company’s stock showed little immediate reaction to the news, trading up slightly at $172.74 in a recent session. Wall Street analysts maintain a generally positive outlook on Steel Dynamics, with a consensus target price of $183.08 and 10 of 13 analysts rating the stock a 'Buy' or 'Strong Buy'.
While the consortium has not publicly stated its next move, the repeated attempts suggest a strong desire to complete the transaction. The standoff leaves investors and market observers to speculate whether Steel Dynamics and its partners will return with a more compelling offer or abandon the pursuit to seek other strategic acquisitions.