Worthington Steel closes Kloeckner takeover with 62% stake

Worthington Steel Inc. completed its €11.00-per-share takeover of Kloeckner & Co SE on Wednesday, securing roughly 62% of the German metals processor's outstanding shares and creating the second-largest service center in North America.

"This is an important milestone for Worthington Steel and a meaningful step forward in our growth strategy," said Geoff Gilmore, president and chief executive officer of Worthington Steel. "Kloeckner brings strong capabilities, a talented team and a shared commitment to performance."

The Columbus, Ohio-based metals processor will now pursue a public delisting tender offer for the remaining Kloeckner shares at the same €11.00 cash price, according to a statement. The delisting offer, which carries no minimum acceptance threshold or closing conditions, requires review by the German Federal Financial Supervisory Authority before publication. Kloeckner shares are currently listed on the Frankfurt Stock Exchange's regulated market and included in the SDAX index.

Worthington Steel financed the acquisition with a $700 million issuance of 7.750% senior secured notes due 2033 and a $700 million seven-year senior secured term loan B facility, both completed on June 1. The notes carry a special mandatory redemption at par plus accrued interest if the deal is not consummated by March 12, 2027. Proceeds will also repay certain existing debt of both companies and cover transaction fees.

Kloeckner operates roughly 110 warehouse and processing locations, primarily in North America and the DACH region of Germany, Austria and Switzerland, supplying more than 60,000 customers. The company reported sales of about €6.4 billion in fiscal 2025 and employs more than 6,000 people. Worthington Steel, with 37 facilities across seven states and 10 countries, expects the combination to broaden its product portfolio, diversify end-market exposure and strengthen its geographic footprint.

Synergy Target and Analyst View

Worthington Steel expects to achieve $150 million in cost and commercial synergies by the end of fiscal 2028, which runs through May 2028, with the bulk concentrated in North America — the source of about 75% of Kloeckner's shipments. KeyBanc Capital Markets raised its price target on Worthington Steel to $46 from $38 on June 2, maintaining an Overweight rating, citing the faster-than-expected close. The stock traded at $43.80 on Tuesday, up 2.65%, implying roughly 9.5 times enterprise value to earnings before interest, taxes, depreciation and amortization on KeyBanc's fiscal 2027 estimate.

Guido Kerkhoff, chief executive officer of Kloeckner, described the transaction as "the outcome of a deliberate strategic journey" focused on higher-value products and services, building scale in North America and Europe, and finding a partner that shares the company's vision.

The delisting, once effective, will remove Kloeckner shares from trading on regulated markets in Germany and comparable markets abroad, reducing administrative and regulatory obligations for the combined entity. Remaining minority shareholders will face significantly reduced liquidity and limited price discovery for their holdings.

This article is for informational purposes only and does not constitute investment advice.