HNI to Acquire Steelcase in $2.2B Deal Amid Office Comeback

HNI Corporation has officially agreed to acquire office-furniture rival Steelcase in a landmark $2.2 billion all‑cash and stock transaction. As corporate demand for in‑office workplaces rebounds, the two industry giants aim to create a combined enterprise with pro forma annual revenue of approximately $5.8 billion. This merger delivers a substantial premium to Steelcase shareholders and promises synergies and broader market coverage across key sectors including healthcare, education, corporate and SMB clients.

Deal Terms and Shareholder Impact

Steelcase shareholders will receive $7.20 in cash plus 0.2192 shares of HNI stock for each share they hold—valuing Steelcase at roughly $18.30 per share, nearly an 80% premium over its prior close. Following the announcement, Steelcase stock surged 45–50% in premarket trading, while HNI shares fell 20–25%, reflecting the deal’s dilution impact on HNI shareholders.

Upon closing, expected by the end of 2025, HNI shareholders will own ~64% of the combined company, with Steelcase shareholders owning about 36%. Financial advisers include J.P. Morgan for HNI and Goldman Sachs & Co (alongside BofA Securities) for Steelcase.

Strategic Rationale: Capitalizing on Return‑to‑Office Demand

HNI’s CEO Jeffrey Lorenger emphasized that the acquisition aligns with accelerating post‑pandemic return‑to‑office trends. As more corporations require employees to return to physical workplaces, demand for ergonomic furnishings, modular workspaces and collaborative environments is rising.

The combination leverages complementary geographic footprints and dealer networks, bolstering reach into diverse markets—from small‑to‑medium businesses and large corporates to education, healthcare and hospitality sectors. This broader coverage is expected to spark growth and operational efficiency.

Company Profiles: HNI and Steelcase at a Glance

HNI Corporation

Founded in Muscatine, Iowa, HNI is a leading provider of workplace furnishings and residential building products. With $2.4 billion in net sales (2023) and a portfolio of brands including HON, Allsteel and Gunlocke, HNI has steadily expanded through strategic acquisitions such as Kimball International in 2023 ($485 million deal).

Steelcase Inc.

Based in Grand Rapids, Michigan, Steelcase generated $3.2 billion in annual revenue (2024/2025), with net income of $81.1 million and around 12,000 employees and dealers worldwide. The company operates roughly 770–790 dealer locations globally across Americas, EMEA and Asia‑Pacific.

Financial Outlook and Synergies

The combined entity is projected to generate annual revenue of about $5.8 billion, unlocking $120 million in annual run‑rate synergies through cost savings, distribution efficiencies and enhanced dealer penetration.

Steelcase expects organic revenue growth in 2026 in the low‑ to mid‑single digits, following flat fiscal 2025 performance and modest order growth in the Americas offset by international weakness.

Key Benefits and Synergy Drivers

• Expanded product portfolio combining Steelcase’s workspace innovations with HNI’s diverse brand offering
• Extended global reach, leveraging over 1,500 combined dealer locations and complementary geographic coverage
• Diversified customer base, across corporate, SMB, education, healthcare and residential building clients
• Cost and operational efficiencies, through shared logistics, procurement and administrative functions
• Accelerated innovation and workplace transformation strategies, as companies shift back to office-based work

These drivers position the merger to unlock sustainable long-term growth for the combined enterprise.

Share Price Movement and Market Reaction

Following the acquisition announcement, Steelcase shares jumped between 45% and over 50%, reflecting strong investor confidence in the premium valuation and upcoming upside. Conversely, HNI shares dropped between 15% and 25% as markets factored in dilution risks, share issuance and integration costs.

Deal Timeline and Closing Conditions

The companies expect the transaction to close by the end of calendar 2025, subject to regulatory approval and customary closing conditions.  At closing, shareholder ownership stakes will be allocated with HNI at ~64% and Steelcase at ~36% of the combined entity.

Quick Facts About the Deal

• Deal value: ~$2.2 billion in cash and stock
• Steelcase per‑share compensation: $7.20 cash + 0.2192 HNI shares
• Implied share price: ~$18.30 (nearly 80% premium)
• Immediate stock moves: Steelcase up ~50%; HNI down ~20–25%
• Combined revenue: Projected at ~$5.8 billion annually
• Annual synergies: Expected at ~$120 million
• Ownership split post‑close: HNI ~64%, Steelcase ~36%
• Consumer segments: SMB, large corporates, education, healthcare, hospitality
• Closing timeframe: By end of 2025
• Financial advisers: J.P. Morgan (HNI), Goldman Sachs/Goldman & Co & BofA Securities (Steelcase)

Conclusion

HNI’s acquisition of Steelcase marks a major consolidation in the office-furniture space, driven by a shift back toward office work environments. The merger creates a powerhouse with strong scale, cross‑market presence and enhanced service capabilities for diverse client segments. With projected synergies and a compelling growth outlook, the combined company is well positioned to lead the future of workplace transformation.