SMU Exclusive: Worthington's Gilmore touts closing of Kloeckner acquisition

Worthington said it was in talks to acquire Düsseldorf, Germany-based metal distributor Kloeckner back in December. The companies signed a formal agreement in January. At the end of March, Worthington said it had exceeded the deal’s 57.5% share threshold.

Last Wednesday, when it announced the closing of the deal, Worthington said it had secured ~62% of Kloeckner’s outstanding shares.

Nuts and bolts

First off, Gilmore spoke a little about the hurdles to getting the deal done. As this was an American company acquiring a German-headquartered one, it required attention to both European Union and German regulations.

“It’s our first time purchasing a publicly shared company, let alone a publicly shared company that’s traded on a German stock exchange,” Gilmore said. “There’s a lot more complexity and steps that you need to follow through this process.”

He called that process “highly structured,” but noted Worthington has been able to navigate it quite well to get to this point.

“There were no curveballs or anything that really required us to alter our direction,” Gilmore said. “It went absolutely according to plan.”

Additionally, he labeled closing the deal a milestone, and he’s upbeat about the road ahead.

“We’re highly optimistic about bringing two highly complementary companies together,” he said. “We feel strongly that it’s going to expand our geographic footprint, and expand the products and processing capabilities we’re going to be able to provide to the customers as well.”  

Right now, Gilmore said that though Worthington owns a controlling interest in Kloeckner, “We really need to operate as two separate publicly shared entities.”

He noted that will remain in place until the company is able to complete the delisting process for Kloeckner, “and then what’s called a domination and profit and loss transfer agreement (DPLTA).”

Gilmore put the timeline for completing the DPLTA as the late second half of this year.

Worthington has said its offer for Kloeckner implies an enterprise value of $2.4 billion.

North American focus, Kloeckner synergies

Since the acquisition was announced, Gilmore has stressed that Worthington Steel’s focus will remain on North America. Now that the deal has closed, he was adamant: “No change there.”

Kloeckner has a significant presence in the US, specifically in the South, through its American subsidiary Kloeckner Metals Corp., headquartered in Alpharetta, Ga.

“If you look at the majority of our synergies, which we had identified as $150 million in run-rate EBITDA synergies over the next few years, that is primarily North America,” Gilmore said. “So our focus on integration and synergy capture will be highly directed towards the North American business.”

He pointed out the two companies have highly complementary geographical footprints there. Worthington Steel is mostly in the Midwest and North, and Kloeckner has a significant presence in the southern US, and “quite a bit of overlap in Mexico,” where both have operations.

“We’re so excited to have that expanded geographic reach in the States,” Gilmore said. “I know that’s an area that customers are quite excited about.”

Beyond geographic reach, the two companies also serve different end markets. Gilmore noted that Kloeckner’s heavier presence in appliances and Worthington’s exposure and expertise in automotive could yield synergies, for example.

Future European M&A?

When asked if the company was eyeing other M&A opportunities in Europe, Gilmore didn’t mince words.

“We’ve always been clear that outside of this acquisition, any type of business that we would pursue out of North America would really need to be electrical steel related,” he said.

Beyond that, Worthington is concentrating on the next steps of integrating Kloeckner.

“As excited as we are about Kloeckner, there’s a lot of work to do,” he said. “The integration and paying down debt and blending the cultures will take time, but this is truly a jumping-off point for our overall growth strategy.”

Reflecting on the intricacies of the deal, where an American company meets EU and German regulations, Gilmore laughed.

“I’ve probably learned more over the last probably two years than I’ve ever learned in a two-year span in my entire career,” he said.

“But, unfortunately, I’m probably never going to use it again,” he quipped. “It’s been a real learning experience.”

While all that hard-won knowledge may not be needed again anytime soon, the deal definitely marks a concrete step in Worthington’s transformational growth strategy.

Steel Summit 2026

We are proud to announce Gilmore will be appearing on a service center panel at SMU’s Steel Summit 2026 in Atlanta. It runs from Aug. 24-26. Get your questions ready, and we hope to see you there!