Steelcase’s merger with HNI valued at $2.2 billion after a year of courtship

Steelcase Inc.’s $2.2 billion acquisition by HNI Corp had its beginnings over a year ago when HNI’s directors initiated discussions on acquiring the iconic Grand Rapids furniture company to enhance shareholder value. The merger announcement in the previous month took the office furniture industry by surprise.

The deliberations began during an August 13, 2024 board meeting at HNI, where the acquisition of Steelcase was proposed as a strategic move to increase shareholder value. Following this, J.P. Morgan was hired in October to provide advisory services for a potential deal. Subsequently, in November 2024, HNI’s Chairman and CEO reached out to Steelcase’s President and CEO to express their interest in a “strategic transaction.”

After initial talks, a non-binding proposal was presented by HNI to Steelcase in November 2024, offering $6.90 in cash plus 0.1843 HNI shares for each Steelcase share, valuing the deal at $17.25 per share. However, Steelcase’s board deemed the terms inadequate and opted not to proceed with HNI.

Concurrently, Steelcase’s directors explored their options despite turning down HNI’s offer, where they reviewed a strategic plan considering various areas for improvement. Meanwhile, HNI revised its offer in January 2025 to $18 per share, comprising $7.20 cash and 0.2192 HNI shares per Steelcase share.

Amidst revised proposals and negotiations, discussions continued between the two parties, leading to a mutual confidentiality agreement in March 2025 and more detailed management meetings between Steelcase and HNI with a focus on strategic rationale. Throughout the spring, there were exchanges of business plans and projections, eventually leading to due diligence in mid-June.

Negotiations culminated in HNI increasing its offer to $18.41 per share in early July, incorporating changes in share price and involving the appointment of two Steelcase directors to HNI’s board. Further discussions ensued, where Steelcase requested three board seats, ultimately settling on two. After continuous talks and meetings, the agreement was finalized in early August, with the announcement made soon after.

The deal holds significant implications for the industry given Steelcase’s widespread operations and significant workforce. With approximately 11,300 employees and a global presence across 790 locations, including 3,400 employees in Grand Rapids, the merger marks a significant development in the office furniture sector, with potential far-reaching consequences within the market.