Distributors/Service Centers
March 26, 2026
Worthington says Kloeckner deal advancing as market tightens
Written by Laura Miller
Worthington Steel reported steady progress on its planned acquisition of Kloeckner & Co., calling the deal a major strategic step as steel markets show early signs of tightening in the US and remain under pressure in Europe.
Kloeckner acquisition progressing
President and CEO Geoff Gilmore said on a Thursday morning conference call to discuss Worthington’s quarterly earnings results that the voluntary public tender offer launched in Germany is “progressing well.” Regulatory filings have been submitted, and some approvals have already been received. The company expects to meet the 57.5% minimum acceptance threshold and continues to target closing in the second half of this year.
Worthington has already purchased about 8% of Kloeckner shares in the open market, using $101 million in ABL borrowings. Management said it remains comfortable with the planned capital structure despite macro uncertainty in Europe.
The Columbus, Ohio-based company has already begun integration planning focused on governance, day-one readiness, and cultural alignment. Gilmore said early interactions with Kloeckner employees reinforced the fit between the two organizations. Additionally, customer and supplier feedback has been “overwhelmingly positive.”
“As a reminder, the German public company takeover process is highly structured, and we will continue to provide updates as we reach key milestones,” added Gilmore.
Market update
On the market side, Worthington described the third fiscal quarter as volatile. Galvanized spreads remained compressed, and winter weather slowed industrial activity. Direct shipments rose year over year, led by automotive. “Our direct shipments in Q3 to the Detroit Three increased by approximately 13%,” Gilmore reported.
The company expects automotive demand to strengthen later in 2026, supported by growing confidence that a USMCA agreement will be completed. Agriculture appears to be near a trough, with a slow rebound expected later in the year. Construction remains flat, though data center activity continues to grow. Heavy truck and trailer markets are soft but expected to improve in the back half of the year.
Steel prices moved sharply higher during the quarter. Hot-rolled coil rose about $175 per ton to roughly $975/ton. Worthington expects inventory holding gains of $15-20 million in the fourth fiscal quarter.
European conditions remain difficult. Kloeckner’s European operations saw weaker demand for electrical steel and automotive products, along with intensified competition from China. Worthington said it is taking cost actions and operational steps to stabilize performance, but views the near-term environment as “challenging.”
Positioning itself
Despite the mixed backdrop, management said the service center group is well-positioned. The company continues to advance its electrical steel investments in Canada and Mexico and is deploying automation and AI tools to reduce manual work, tighten inventory, and improve flow.
Gilmore closed the call by reiterating confidence in both the market outlook and the Kloeckner transaction: “We could not be more well-positioned to continue to grow as a company… and achieving the threshold goal for Kloeckner puts us in a position to accelerate growth moving forward.”
