Worthington Steel Announces Control Agreement with Klöckner

What Happened
On September 8, 2026, Worthington Steel GmbH (an indirect, wholly owned German subsidiary of Worthington Steel, Inc.) entered into a Domination and Profit and Loss Transfer Agreement (DPLTA) with Klöckner & Co SE. The DPLTA would give Worthington Steel GmbH the right to issue binding instructions to Klöckner’s management board, require Klöckner to transfer annual profits to Worthington Steel GmbH, and require Worthington Steel GmbH to absorb Klöckner’s annual losses, subject to German law. The DPLTA’s effectiveness is subject to approval by Klöckner’s general meeting (qualified majority) and Worthington Steel GmbH’s shareholder meeting, and to registration in the local commercial register; it cannot become effective earlier than January 1, 2027. The company noted registration may be delayed by shareholder litigation, and that outside shareholders can challenge the compensation terms in court appraisal proceedings.

Key Details

• Date filed: September 8, 2026; earliest possible effectiveness: January 1, 2027.
• Governance/control: Worthington Steel GmbH may issue binding instructions to Klöckner’s management board once effective.
• Profit/loss treatment: Klöckner will transfer annual profits to Worthington Steel GmbH; Worthington Steel GmbH will absorb annual losses (subject to law).
• Shareholder payments: Outside shareholders may elect either (a) EUR 11.00 per share cash under Section 305 AktG, or (b) a recurring annual payment of EUR 0.67 gross (EUR 0.66 net under current tax rules) per full fiscal year under Section 304 AktG; these amounts may be challenged in German appraisal (Spruchverfahren) proceedings, which could result in higher awards.
• Approvals and timing: Requires a qualified majority at Klöckner’s general meeting and approval by Worthington Steel GmbH’s shareholders; registration with the Handelsregister is required and may be delayed by litigation.

Why It Matters
This agreement, if approved and registered, would give Worthington operational control of Klöckner and consolidate Klöckner’s profits and losses into Worthington’s structure under German law. That can affect Worthington’s future earnings, cash flows and balance sheet depending on Klöckner’s results and any payments to outside shareholders. Timing and ultimate cost are uncertain: the DPLTA still requires corporate approvals and registration and may face shareholder challenges and litigation that could delay or change financial terms. Investors should watch follow-up filings and disclosures for approvals, registration updates, and any appraisal or other litigation that could affect the transaction’s cost or timing.