OneSteel acquires Smorgon Steel
Australian steelmaker OneSteel Ltd. is acquiring
Smorgon Steel Group Ltd. for $1.16 billion (Australian). OneSteel
Chairman Peter Smedley said the takeover was a logical step for
Australia’s steel industry in the face of intense competition
from overseas steel producers.
“The transaction represents the next step
in the restructuring of the Australian steel industry,’’
Smedley said in a statement. “It will further consolidate
the sector, leading to a lower cost and more efficient steel industry
from which to effectively compete in the world steel market for
years to come.’’
Smorgon’s Board of Directors have unanimously
recommended the One-Steel offer in the absence of a superior bid
and scheduled a vote for October. The acquisition is also subject
to approval from Australia’s antitrust regulator, the Australian
Competition and Consumer Commission.
Under the proposed deal, Smorgon shareholders
will receive a combination of OneSteel shares and cash to the value
of $1.23 per share, a 31.8% premium over the average value of Smorgon
Smorgon investors will receive 9 OneSteel shares
for every 22 Smorgon shares. Smorgon’s directors have unanimously
recommended the OneSteel offer in the absence of a superior bid.
OneSteel is a producer of steel products for the
automotive and construction industries, making 1.7 million tons
of steel a year and selling a total of 2.2 million tons a year of
steel and metal products.