DEFM14A: Ryerson to Acquire Olympic Steel in All-Stock Merger

Ryerson Holding Corporation will acquire Olympic Steel, Inc. in an all-stock transaction, creating North America's second-largest metals service center.

Summary

• Ryerson Holding Corporation (RYI) will acquire Olympic Steel, Inc. (ZEUS) in an all-stock merger, with Olympic Steel becoming a wholly-owned subsidiary of Ryerson.
• Olympic Steel shareholders will receive 1.7105 shares of Ryerson common stock for each share of Olympic Steel common stock, with cash paid in lieu of fractional shares.
• Upon completion, Ryerson stockholders are estimated to own approximately 63.0% and Olympic Steel shareholders approximately 37.0% of the combined company on a fully diluted basis.
• The implied value of the merger consideration for Olympic Steel shareholders was approximately $39.26 per share based on Ryerson's 30-day volume-weighted average price on October 24, 2025, representing a premium of approximately $10.18 over Olympic Steel's closing price on October 27, 2025.
• The combined entity is projected to process 2.9 million tons and generate $6.5 billion in annual revenue, based on combined fiscal year 2024 results.
• Annual cost synergies of $120 million are anticipated within 24 months of closing, primarily from procurement scale, efficiency gains, commercial enhancement, and network optimization.
• The merger is expected to be accretive to adjusted earnings per share for both Ryerson stockholders and Olympic Steel shareholders.
• The pro-forma leverage ratio is expected to be less than three times, assuming partial credit for synergies.

Sentiment

Score: 8

Explanation: The filing presents a strong positive sentiment towards the merger, highlighting significant strategic benefits, substantial synergies, and financial accretion for both parties. The unanimous board recommendations and fairness opinions from financial advisors reinforce this positive outlook. While risks are disclosed, they are presented as standard for such transactions and are outweighed by the anticipated benefits.

Positives

• The merger is a highly compatible strategic match, integrating Olympic Steel's complementary footprint, capabilities, and product offerings into Ryerson's network.
• The combined company will become the second-largest metals service center in North America, enhancing market presence and scale.
• The addition of Olympic Steel's value-added downstream business lines is expected to be accretive to margins and improve financial stability across business cycles.
• Significant operational benefits are anticipated, including improved purchasing efficiency, scalable IT systems for inventory optimization, higher capacity utilization, and lower cost supply chains.
• The all-stock consideration allows Olympic Steel shareholders to participate in the future value and growth opportunities of the larger, combined company.
• The implied value of the merger consideration offered a substantial premium to Olympic Steel's unaffected stock price at the time of the initial announcement.
• The merger is expected to result in a reduced pro-forma leverage ratio, enhancing financial health.
• Both Ryerson's and Olympic Steel's boards of directors unanimously recommended the merger, and their respective financial advisors issued fairness opinions.
• The transaction is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes for Olympic Steel shareholders (excluding cash for fractional shares).
• An experienced leadership team will oversee the combined company, including key executives from both entities.

Negatives

• The fixed exchange ratio means the market value of the merger consideration will fluctuate with Ryerson's stock price, creating uncertainty for Olympic Steel shareholders.
• Current Ryerson stockholders and Olympic Steel shareholders will experience reduced ownership and influence in the combined company.
• There is a risk that the merger may not be completed due to unfulfilled conditions, regulatory issues, or termination rights.
• The merger agreement includes provisions that may discourage alternative acquisition proposals and requires termination fees ($15 million for either party) under certain circumstances.
• Failure to complete the merger could negatively impact the stock prices and business operations of both companies, and they would still incur significant transaction costs.
• Directors and executive officers of both companies have interests in the merger that may differ from general shareholders, including treatment of equity awards and new employment arrangements.
• The unaudited pro forma financial statements and prospective information are based on estimates and assumptions, and actual future results may differ materially.
• There is a risk of not successfully integrating the businesses and operations, potentially leading to loss of key employees, customers, suppliers, operational disruptions, and higher-than-expected integration costs.
• The combined company may fail to realize all anticipated benefits, including cost savings and operating synergies.
• The completion of the merger may trigger change-in-control or default provisions in certain existing agreements, such as the Olympic Steel Loan Agreement.
• The market price of Ryerson common stock after the merger may be affected by factors different from those historically affecting it, and future sales of Ryerson common stock could depress its price.
• There is no guarantee that the combined company will continue to declare and pay dividends or repurchase shares at historical levels.

Risks

• The market value of the merger consideration will fluctuate with the price of Ryerson common stock, creating uncertainty for Olympic Steel shareholders.
• Current Ryerson stockholders and Olympic Steel shareholders will have reduced ownership and less influence over the management of the combined company.
• The merger may not be completed, and the merger agreement may be terminated, leading to adverse impacts on stock prices and businesses.
• The merger agreement limits the ability of both companies to pursue alternative transactions and includes termination fees of $15 million for certain breaches or superior proposals, and up to $10 million for expense reimbursement.
• Failure to complete the merger could result in negative reactions from financial markets, customers, suppliers, and employees, and significant unrecoverable costs.
• Directors and executive officers have interests in the merger that may differ from general stockholders/shareholders, including treatment of equity awards and new employment arrangements.
• The unaudited pro forma financial statements and prospective financial information are based on estimates and assumptions that may not be realized, potentially affecting the combined company's future results.
• The market price of Ryerson common stock after the merger may be affected by factors different from those historically affecting it.
• Failure to successfully integrate Ryerson's and Olympic Steel's businesses and operations in the expected timeframe may adversely affect the combined company's business and results of operations.
• The combined company may fail to realize all of the anticipated benefits of the merger, including cost savings and operating synergies.
• The merger may result in a loss of customers, suppliers, or other business counterparties due to uncertainty.
• Completion of the merger may trigger change-in-control, default, or other provisions in certain agreements to which Olympic Steel is a party, such as the Olympic Steel Loan Agreement.
• Ryerson or Olympic Steel may waive one or more of the closing conditions without re-soliciting stockholder approval.
• The merger agreement subjects Ryerson and Olympic Steel to restrictions on their respective business activities prior to the effective time.
• Significant costs will be incurred in connection with the merger and integration, which may exceed anticipated amounts.
• If the merger does not qualify as a reorganization for U.S. federal income tax purposes, Olympic Steel shareholders may be required to pay substantial U.S. federal income taxes.
• Litigation relating to the merger could result in an injunction preventing completion and/or substantial costs.
• Ryerson stockholders and Olympic Steel shareholders will not be entitled to appraisal rights in the merger.
• Future sales or issuances of Ryerson common stock could have a negative impact on its stock price.
• There is no guarantee that Ryerson will continue to declare and pay dividends or repurchase shares of Ryerson common stock following the merger.
• The combined company may record goodwill and other intangible assets that could become impaired, resulting in material non-cash charges.
• Shares of Ryerson common stock received by Olympic Steel shareholders will have different rights from shares of Olympic Steel common stock due to differing state laws and corporate governance documents.

Future Outlook

The merger is expected to close in early 2026, subject to shareholder and regulatory approvals. The combined company will maintain Ryerson's current headquarters in Chicago, Illinois. Future decisions regarding dividends and share repurchases will be at the discretion of the combined company's board of directors, based on financial condition, cash flows, and strategic needs.

Management Comments

• Edward J. Lehner, President and Chief Executive Officer of Ryerson Holding Corporation, and Richard T. Marabito, Chief Executive Officer of Olympic Steel, Inc., expressed pleasure in enclosing the joint proxy statement/prospectus for the proposed all-stock acquisition.
• The Ryerson board of directors unanimously determined that the merger and the issuance of shares are advisable, fair to, and in the best interests of Ryerson and its stockholders, recommending a 'FOR' vote.
• The Olympic Steel board of directors unanimously determined that the merger is fair to and in the best interests of Olympic Steel shareholders, approving the merger agreement and recommending a 'FOR' vote on all proposals.

Industry Context

The merger is set to create the second-largest metals service center in North America, consolidating operations in a highly competitive and fragmented industry. This strategic move aims to leverage complementary assets, capabilities, and expertise across various channels and geographies, potentially leading to enhanced market position and operational efficiencies.

Comparison to Industry Standards

• The merger will establish the combined entity as the second-largest metals service center in North America, indicating a significant increase in market share and competitive standing.
• Financial advisors (J.P. Morgan for Ryerson, KeyBanc and Houlihan Lokey for Olympic Steel) conducted analyses comparing the companies to selected publicly traded companies and precedent M&A transactions in the metals distribution industry to assess the fairness of the exchange ratio.

Management Changes

Corporate Governance

Legal Proceedings

• Securities class action lawsuits and derivative lawsuits are often brought against public companies in connection with acquisition agreements, and defending against these claims can result in substantial costs and management time.
• An adverse judgment in such lawsuits could lead to monetary damages or injunctive relief, potentially delaying or preventing the merger.
• One of the conditions to closing is that no law or order prohibits the merger, meaning successful litigation could block the transaction.

Related Party Transactions

• From January 1, 2024, through October 28, 2025, there have been no transactions or contracts between Olympic Steel or its subsidiaries and any affiliates (other than Olympic Steel subsidiaries) or other persons that would be required to be reported by Olympic Steel pursuant to Item 404 of Regulation S-K that have not been reported.
• From January 1, 2024, through October 28, 2025, there have been no transactions or contracts between Ryerson or its subsidiaries and any affiliates (other than Ryerson subsidiaries) or other persons that would be required to be reported by Ryerson pursuant to Item 404 of Regulation S-K that have not been reported.

Stakeholder Impact

• Shareholders: Olympic Steel shareholders receive a premium and continued equity participation in a larger, more diversified combined company. Ryerson stockholders maintain majority ownership and are expected to benefit from accretion and synergies.
• Employees: Potential for uncertainty regarding roles, risk of losing key employees, but also new employment arrangements for key Olympic Steel executives and a retention program for other employees.
• Customers and Suppliers: Business relationships may be disrupted due to uncertainty surrounding the merger, potentially affecting ongoing operations.
• Creditors: Olympic Steel's existing credit facility is expected to be repaid and terminated, impacting its creditors.
• Management: Key Olympic Steel executives will assume significant roles in the combined company, and the board will include directors from both entities.

Next Steps

• Ryerson stockholders will vote on the issuance of Ryerson common stock in the merger at a special meeting on February 12, 2026.
• Olympic Steel shareholders will vote on the adoption of the merger agreement and a non-binding advisory proposal on executive compensation at a special meeting on February 12, 2026.
• Both companies will continue to cooperate in planning the integration of their business operations.
• Ryerson will file a registration statement on Form S-8 for shares issuable under assumed Olympic Steel equity awards.
• Ryerson and Olympic Steel will cooperate to delist Olympic Steel common stock from Nasdaq and deregister it under the Exchange Act post-closing.

Key Dates

Recommendation

The proposed all-stock merger between Ryerson and Olympic Steel is strategically compelling, creating a larger, more diversified entity with significant market presence as the second-largest metals service center in North America. The anticipated $120 million in annual cost synergies and expected accretion to adjusted EPS for both sets of shareholders suggest strong financial benefits. The premium offered to Olympic Steel shareholders, coupled with their continued equity participation in the combined company, provides an attractive value proposition. While integration risks and market fluctuations exist, the unanimous board recommendations and positive financial advisor opinions underscore the confidence in the transaction's long-term value creation potential. The fixed exchange ratio also offers Olympic Steel shareholders upside potential if Ryerson's stock price appreciates.

Keywords

Metals Service Center, Merger, Acquisition, All-Stock Transaction, Ryerson Holding Corporation, Olympic Steel Inc., RYI, ZEUS, SEC Filing, Corporate Governance, Shareholder Vote, Synergies, Integration, Risk Factors, Financial Advisory, Proxy Statement