The steelmaker's billion-dollar offer for Canada's Harris Steeel quickens the pace of global consolidation
The current round of global steel industry consolidation forges ahead. Nucor Corp. (NUE) said Jan. 2 it's offering around $1.07 billion for Canadian outfit Harris Steel Group (HSG.TO).
Charlotte, N.C.-based Nucor would be paying C$46.25 in cash for each share of Toronto's Harris Steel. Nucor would let Harris Steel operate as a separate, wholly owned subsidiary.
"The acquisition of Harris Steel Group significantly advances Nucor's downstream growth initiatives," said Nucor's CEO Dan DiMicco in a press release Jan. 2.
The tender offer will remain open for a minimum of 35 calendar days and has the full support of the Boards of Directors of both Nucor and Harris Steel Group. Also, Harris Steel's CEO John Harris and other members of his family, along with its COO Paul Kelly, have agreed to tender their shares to the offer. Their agreement will deliver more than 50% of Harris Steel's shares to Nucor.
The deal remains subject to regulatory approvals in the U.S. and Canada. Once completed, Nucor expects the transaction to begin growing its earnings immediately.
Nucor's stock closed on Friday Dec. 29 at $54.66 per share, down 1.1% on the day. The New York Stock Exchange was closed on Jan. 2 in observance of former President Gerald R. Ford's funeral. Harris Steel share prices surged 5.8% to C$46 per share on the Toronto Stock Exchange.
Nucor and Harris Steel aren't the only steel companies scrambling to buy one another up as the industry consolidates around the world. According to press reports on Jan. 2, India's Tata Steel said it may raise its offer to acquire UK-nased Corus by as much as 10%. And Mittal Steel Company (MT) is planning a multi-billion merger with Arcelor S.A by June, 2007. The combined group will be headquartered in Luxembourg and named Arcelor Mittal.