How the $13b bid for BlueScope may sidestep one of Australia's toughest regulators
Ryan Stokes' SGH and US based Steel Dynamics are quietly confident their bid for the Australian steelmaker will avoid the wrath of the unpredictable Foreign Investment Review Board.
Ryan Stokes' industrial services group SGH and US-based Steel Dynamics believe their $13 billion move for BlueScope can avoid the wrath of the Foreign Investment Review Board (FIRB), eliminating a major potential obstacle facing all cross-border transactions.
BlueScope revealed late on Monday night it had knocked back three earlier approaches from Steel Dynamics for its entire business, in part due to “significant execution risk in relation to regulatory outcomes”. That has widely been interpreted as a reference to the Australian steelmaker's concerns that the earlier proposals may have been blocked by FIRB, which has an unpredictable history of rejecting cross-border deals.
But under the latest, $13 billion non-binding indicative offer, BlueScope would be wholly owned by Australian company SGH before its North American assets are divested to Nasdaq-listed Steel Dynamics.
As such, the move is being framed as an Australian company acquiring another Australian company, even though Steel Dynamics may end up funding the bulk of the transaction.
