Building products manufacturer HNI Corporation on Monday announced it will acquire peer Steelcase Inc. in a cash-and-stock transaction valued at approximately $2.2 billion. The definitive agreement, disclosed by both companies, will see Steelcase common shareholders compensated with a mix of cash and HNI stock.
As part of the buyout conditions, Steelcase shareholders will get a combination of cash and HNI stock, the deal is anticipated to be completed by the end of 2025. HNI investors will own roughly 64% of the combined company after the merger is complete, with Steelcase shareholders keeping the remaining 36%.
The Muscatine, Iowa-based HNI makes workplace furnishings and residential building products. Its acquisition of Steelcase comes at a time when “in-office work trends accelerate,” HNI’s CEO Jeffrey Lorenger said.
Investor Sentiment Shows Mixed Response
Initial market hours saw a roughly 40% increase in Steelcase shares after the news, indicating investor optimism regarding the company’s prospects under the new management. On the other hand, HNI’s stock dropped about 20% in early trading as investors considered the scope and implications of the deal.
The transaction comes at a time when demand for in-office furniture and infrastructure is seeing a gradual recovery. With many companies encouraging employees to return to physical workspaces post-pandemic, the sector is witnessing renewed interest and capital flow.
What the Acquisition Means for the Industry
Two of the biggest manufacturers of office furniture, Steelcase and HNI, declared their intention to merge. Grand Rapids-based Steelcase Inc., which was established in 1912, stated that it is selling the company to HNI Corporation, one of its rivals. Steelcase Inc. is a world leader in interior design, office furniture, and space solutions for workplaces, classrooms, and hospitals. After the conclusion, HNI anticipates that the combined business would generate $5.8 billion in net sales annually and that it will be able to grow its products in the health care, education, and hospitality sectors. Investopedia reported that HNI stated, “The combined company’s ability to serve more customers across diverse industry segments, including small and medium businesses, large corporations, healthcare, education, and hospitality customers, is bolstered by the highly complementary geographic footprints and dealer networks.”
HNI anticipates that the acquisition will greatly expand its product offerings in industries like hospitality, education, and healthcare. The combined company is projected to generate $5.8 billion in annual net sales, bolstered by an estimated $120 million in annual run-rate synergies.
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Strategic Complement in Scale and Reach
The two companies emphasized their complementary geographic footprints and dealer networks, which are anticipated to improve reach and service delivery across diverse client bases. This covers huge corporations, small and medium-sized enterprises, and institutional purchasers in quickly expanding sectors.
Additionally, the combination will enable both companies to better meet the needs of post-COVID hybrid office models, which call for more adaptability in space economy, smart infrastructure, and furniture design.
The transaction is subject to customary closing conditions and regulatory approvals. Once finalized, the unified company aims to leverage its combined legacy, innovation capabilities, and global operations to gain a competitive edge in a consolidating market.
Both parties have recruited financial consultants, and in the upcoming quarters, internal integration teams are anticipated to start operational planning.
