Steelcase is selling the business to its arch rival HNI in $2.2 billion defining deal. Here's why

Building products maker HNI has agreed to buy peer Steelcase in a cash and stock transaction worth about $2.2 billion, the company said on Monday. Steelcase's shares were up almost 40%, and HNI's were down 20% on low volumes in premarket trading, reported Reuters.

HNI Corporation and Steelcase Inc. on Monday, August 4, announced that they have entered into a definitive agreement for HNI to acquire Steelcase in a cash and stock transaction, with a total consideration of approximately $2.2 billion to Steelcase common shareholders.

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.


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Steelcase to be acquired in $2.2B deal

Steelcase and HNI, two of the largest workplace furniture companies announced they're merging. Steelcase Inc, founded in 1912 in Grand Rapids, announced it is selling the business to one of its competitors, HNI Corporation.

Steelcase Inc. is a global leader in office furniture, interior architecture and space solutions for offices, hospitals and classrooms.

With the acquisition, HNI expects to expand its offerings in the industries of health care, education and hospitality, and for the combined company to generate $5.8 billion in annual net sales after closing.

"Geographic footprints and dealer networks are highly complementary, which bolsters the combined company's ability to serve more customers across diverse industry segments, including small and medium business, large corporate, healthcare, education, and hospitality customers," HNI said, reported Investopedia.

After the pandemic-era work-from-home policies, more companies have been asking their employees to return to their offices to work, buoying demand for in-office accessories and infrastructure.

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HNI stated that the geographic reach and dealer networks of both companies are highly complementary, enabling the combined entity to better serve a broad range of clients — from small and mid-sized businesses to large corporations, as well as key sectors such as healthcare and education.

The merged company is expected to generate approximately $5.8 billion in pro forma annual revenue, with projected annual run-rate synergies of $120 million. Steelcase, headquartered in Grand Rapids, Michigan, operates through a network of dealers and retailers across 790 locations spanning the Americas, EMEA, and Asia Pacific. In 2024, the company reported $3.2 billion in annual revenue and $81.1 million in net income.

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Following the anticipated close of the transaction by the end of 2025, HNI shareholders will own roughly 64% of the combined organization, while Steelcase shareholders will hold the remaining 36%.

J.P. Morgan Securities is acting as exclusive financial adviser to HNI. Steelcase is being advised by Goldman Sachs & Co. and BofA Securities.

(With inputs from Reuters)