BlueScope Shares Drop After Rejecting Joint Bid from Steel Dynamics and SGH

BlueScope Ltd. shares fell 3.7% on Tuesday following the company's rejection of a proposed $1.8 billion all-cash acquisition offer from a consortium of U.S.-based Steel Dynamics Inc. and Australian engineering firm SGH Limited. The move signals the company's continued confidence in its standalone strategy despite pressure from potential buyers.

BlueScope Ltd. saw its stock decline sharply after formally rejecting a $1.8 billion all-cash bid from a joint venture between Steel Dynamics Inc. (SDI) and Sydney-based SGH Limited. The offer, valued at $10.40 per share, represented a 22% premium over BlueScope’s closing price on the day the proposal was made. The company cited strategic alignment and long-term value creation as reasons for turning down the offer, emphasizing its ongoing investments in high-strength steel products and green steel initiatives. The rejection comes amid heightened investor interest in Australia’s steel manufacturing sector, with BlueScope operating major facilities including the Port Kembla works in New South Wales. The company’s 2025 capital expenditure plan includes $320 million allocated to decarbonization projects, including trials of hydrogen-based direct reduced iron (DRI) technology. Despite these investments, the market interpreted the bid rejection as a sign of internal confidence, though some analysts questioned whether the company is underestimating its near-term valuation potential. BlueScope’s shares closed at $9.32 on the ASX, marking the largest single-day drop in the company’s stock since October 2023. The announcement also triggered a reassessment of the broader Australian industrial sector, with SGH Limited’s shares dropping 5.1% and SDI’s U.S. shares dipping 2.3% on the news. Market watchers noted that the failed bid could influence future consolidation trends in the global steel industry, particularly as climate regulations intensify and demand grows for low-carbon steel products.