Worthington Steel to Acquire Kloeckner & Co
Worthington Steel Enters Business Combination Agreement with Kloeckner & Co
Worthington Steel announced today that it has entered into a definitive Business Combination Agreement with Kloeckner & Co, a leading global steel service center and metal processing company listed in Germany (XETR: KCO). The proposed transaction marks a major strategic milestone for Worthington Steel and significantly advances its long-term growth strategy.
Overview of Kloeckner & Co
Kloeckner & Co is a producer-independent steel and metal processor with approximately 110 service and processing locations across North America and Europe. The company offers a broad portfolio of products, including carbon flat-roll steel (sheet and plate), electrical steel, aluminum, stainless steel, and long products.
In recent years, Kloeckner & Co has been actively transforming its business model, shifting toward higher value-added processing and fabrication through targeted mergers and acquisitions, as well as organic strategic growth initiatives.
Strategic Rationale for the Transaction
The proposed acquisition represents a strong strategic fit for Worthington Steel, strengthening its position in the North American metals processing sector while expanding its geographic reach and product offerings. Upon completion, the transaction will create a larger, more diversified metals processing leader with enhanced scale and operational capabilities.
The combination will position Worthington Steel as the second-largest steel service center company in North America by revenue, significantly increasing its competitive standing in the market.
Expanded Portfolio, Scale, and Geographic Reach
The transaction broadens Worthington Steel’s product portfolio, end-market exposure, and geographic footprint. The combined company is expected to benefit from increased scale, shared best practices, and enhanced operational efficiency across facilities in North America and Europe.
Both organizations share a strong commitment to safety, quality, and operational excellence, forming a solid foundation for successful integration and long-term value creation.
Leadership Commentary
This is a strategic and transformative step in Worthington Steel’s growth journey,” said Geoff Gilmore, President and Chief Executive Officer of Worthington Steel. “Through the acquisition of Kloeckner & Co, we will expand our high-value metals processing capabilities and create meaningful value for our shareholders, deepen relationships with our customers and suppliers, and unlock growth opportunities for our employees.”
Gilmore added that both companies share a focus on operational excellence, innovation, and disciplined execution. “By integrating Kloeckner’s capabilities in North America and Europe, we will be stronger together, building a more resilient business and driving long-term shareholder value.”
Guido Kerkhoff, Chief Executive Officer of Kloeckner & Co, also welcomed the transaction. “This combination represents the right next step for Kloeckner & Co as we position our business for the future,” Kerkhoff said. Worthington Steel brings complementary capabilities, a strong reputation, and an experienced leadership team aligned with our strategic priorities. Together, we will be even better positioned to serve customers and support sustainable growth.”
Attractive Transaction Economics and Synergies
Worthington Steel has identified approximately $150 million in anticipated annual cost, operational, and commercial synergies, primarily within North America. These synergies are expected to be fully realized by the end of Worthington Steel’s fiscal year 2028.
The transaction is expected to triple Worthington Steel’s scale, resulting in approximately $9.5 billion in combined annual revenue, while maintaining margins above 7%, inclusive of synergies.
The offer price implies an enterprise value of approximately $2.4 billion, representing an EV/EBITDA multiple of approximately 8.5x based on Kloeckner’s trailing twelve-month EBITDA as of September 30, 2025, and approximately 5.5x when factoring in anticipated run-rate synergies.
The acquisition is also expected to be substantially accretive to Worthington Steel’s earnings per share within the first full year following completion.
Transaction Structure and Execution
Worthington Steel GmbH, a subsidiary formed for the acquisition, intends to launch a voluntary public tender offer to acquire all outstanding shares of Kloeckner & Co. Under the offer, participating shareholders will receive €11 in cash per share.
Kloeckner’s Management Board and Supervisory Board have welcomed the transaction and, subject to review of the Offer Document, intend to recommend acceptance to shareholders. Kloeckner’s executive leadership team is expected to remain in place following completion.
Shareholder Support and Conditions to Closing
SWOCTEM GmbH, Kloeckner’s largest shareholder with approximately 42% ownership, has entered into an Irrevocable Agreement committing to tender its shares in support of the offer.
Completion of the transaction is subject to a minimum acceptance threshold of 65% of Kloeckner’s issued share capital and receipt of customary regulatory approvals. The transaction is expected to close in the second half of calendar year 2026.
Further details will be provided in an Offer Document to be submitted to the German Federal Financial Supervisory Authority (BaFin) for approval, in accordance with German securities regulations.
Financing and Capital Structure
Worthington Steel plans to finance the acquisition through a combination of cash on hand and new debt financing. The transaction will be fully funded through underwritten commitments and is not subject to financing conditions.
At closing, pro forma net leverage is expected to be approximately 4.0x, including synergies. The Company’s post-transaction priority will be deleveraging and synergy realization, with a target to reduce net leverage below 2.5x within 24 months.
Worthington Steel reaffirmed its commitment to a conservative financial strategy, balanced capital allocation, disciplined reinvestment, and continued shareholder returns through dividends.
Advisors and Financing Partners
Andina Partners International LLP and Bank of America are serving as financial advisors to Worthington Steel, with Latham & Watkins LLP acting as legal counsel. Wells Fargo and Citigroup have provided fully underwritten financing commitments for the transaction.
Investor and Analyst Conference Call
Worthington Steel will host a dedicated investor and analyst conference call on January 16, 2026, at 8:30 a.m. ET to discuss the proposed acquisition. The call will be available via webcast on the Company’s investor relations website, with a replay and presentation materials available afterward.
About Worthington Steel
Worthington Steel (NYSE: WS) is a leading metals processor delivering highly technical and customized steel solutions. The Company specializes in carbon flat-roll steel processing, electrical steel laminations, and tailor-welded solutions, supporting a more sustainable future for steel.
Headquartered in Columbus, Ohio, Worthington Steel employs approximately 6,000 people and operates 37 facilities across seven U.S. states and 10 countries, guided by a people-first philosophy and strong commitment to sustainability.
About Kloeckner & Co
Kloeckner & Co is one of the world’s largest producer-independent steel and metal processors, serving more than 60,000 customers through a network of approximately 110 locations, primarily in North America and the DACH region.
The company generated approximately €6.6 billion in revenue in fiscal year 2024 and continues to expand its higher value-added and CO₂-reduced solutions under its Nexigen® brand. Kloeckner & Co shares are listed on the Frankfurt Stock Exchange (Prime Standard) and are included in the SDAX® index.
