Nucor offers $1.07 billion for Harris Steel

/ Source: The Associated Press

Steel products maker Nucor Corp. said Tuesday it has agreed to pay $1.07 billion for Canada’s Harris Steel Group Inc. whose board is recommending that its shareholders accept the all-cash offer.

Nucor said the deal would broaden its geographic reach and give it opportunities to grow.

Nucor is offering $39.69 (46.25 Canadian dollars) for each Harris Steel share, a 6 percent premium over Harris’ closing price of $37.32 (43.49 Canadian dollars) Friday on the Toronto Stock Exchange.

The offer values Harris’s stock at $1.07 billion (1.25 billion Canadian dollars), according to Nucor. Harris also had $105.5 million (123 million Canadian dollars) in debt at the end of September.

The tender offer will be open for at least 35 days and has the support of the boards of both companies, the news release said.

In addition, it said John Harris, chairman and chief executive of Harris Steel, and other members of the Harris family and Paul Kelly, Harris Steel’s president and chief operating officer, have agreed to tender their shares to Nucor, giving Nucor more than 50 percent of Harris Steel shares.

The deal also requires regulatory approval in the United States and Canada. Nucor plans to allow Harris Steel to operate as a separate, wholly owned subsidiary once the deal is completed.

The companies have been partners for the past three years. “Harris provides Nucor with immediate and broad geographical reach and with considerable scale and growth opportunities,” Nucor said in a news release.

Nucor expects the acquisition to immediately bolster earnings.