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OneSteel, Australia's second largest steelmaker, has terminated its $157 million takeover of New Zealand-based Steel & Tube Holdings, citing increased market volatility.
OneSteel, which holds a 50.27 per cent interest in Steel & Tube, was offering $4 for every share in the company it doesn't own, valuing the deal at about $175.47 million (A$157.49 million).
"The situation has changed dramatically since OneSteel NZ announced its intention to make an offer for Steel & Tube last month," OneSteel managing director Geoff Plummer said.
The company cited increased market volatility and the uncertain outlook for Steel & Tube because of its exposure to the New Zealand economy as the reason for the decision.
Steel & Tube is New Zealand's largest distributor of steel and allied products, and was formed in 1953 through the merger of three importers and distributors of steel product.
OneSteel said the rationale behind the takeover was to simplify its corporate structure and efficiently manage the Steel & Tube business as part of the OneSteel group.
OneSteel acquired an initial 8 per cent holding in 1984.
Steel & Tube shares were unchanged at $3.60 yesterday.
- AAP
