Worthington Steel to Acquire Klöckner & Co SE for €11.00 per Share, Creating a $9.5B Revenue Leader

summarizeSummary

Worthington Steel announced a definitive agreement to acquire German-listed Klöckner & Co SE for €11.00 per share, a strategic move expected to create a $9.5 billion revenue leader in the steel service center sector with significant synergies and EPS accretion.

check_boxKey Events

• Acquisition of Klöckner & Co SE

  Worthington Steel, Inc. entered into a Business Combination Agreement to acquire Klöckner & Co SE, a German-listed steel and metal processing company, via a voluntary public cash takeover offer.

• Offer Price and Value

  The offer price is €11.00 per Klöckner share, implying an enterprise value of approximately $2.4 billion for Klöckner & Co SE.

• Strategic Rationale and Synergies

  The acquisition is expected to create the second-largest steel service center company in North America with $9.5 billion in combined revenue and generate an estimated $150 million in annual run-rate synergies, leading to substantial EPS accretion.

• Financing and Leverage

  The transaction will be financed through cash on hand and $1.9 billion in new debt financing, with an anticipated pro forma net leverage of ~4.0x at closing and a target to reduce it below 2.5x within 24 months.

auto_awesomeAnalysis

Worthington Steel, Inc. announced a definitive agreement to acquire Klöckner & Co SE, a German-listed steel and metal processing company, for €11.00 per share through a voluntary public cash takeover offer. This acquisition is highly transformative, creating the second-largest steel service center company in North America with a combined revenue of approximately $9.5 billion. The transaction is expected to be substantially accretive to Worthington Steel's earnings per share within the first full year of operation, driven by an anticipated $150 million in annual run-rate synergies. The deal significantly diversifies Worthington Steel's product portfolio, end markets, and geographic footprint across North America and Europe. The offer is supported by Klöckner's largest shareholder, SWOCTEM GmbH, which has irrevocably committed to tender its approximately 42% stake, and both Klöckner's Management and Supervisory Boards intend to recommend the offer. While the acquisition will initially increase Worthington Steel's pro forma net leverage to around 4.0x, the company aims to reduce this below 2.5x within 24 months, demonstrating a clear deleveraging strategy. The offer is not subject to a financing condition, with $1.9 billion in debt financing commitments secured.