ArcelorMittal Announced Strategic Stake Acquisition in Vallourec

SEATTLE (Scrap Monster): Luxembourg-based leading steelmaker ArcelorMittal announced that it plans to acquire a 28.4% stake in Vallourec for nearly 955 million euros ($1.04 billion).

The company noted that it has entered into a Share Purchase Agreement (SPA) with funds managed by Apollo Global Management towards purchase of 65.24 million shares at a price of 14.64 euros per share. The closing of the transaction is subject to necessary regulatory approvals and is expected in the second half of the current year.

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According to ArcelorMittal, the acquisition of the France-based company will help to increase its exposure to the tubular market. It must be noted that Vallourec, a global leader in premium tubular solutions for energy markets and industrial sectors, had undergone successful restructuring in recent years.

Nearly 85% of Vallourec’s annual rolling capacity is focused around production hubs in the U.S. and Brazil, which happens to be the primary strategic markets for the steelmaker, the company press release said.

Vallourec had reported EBITDA of €1.2 billion on sales of €5.1 billion during the previous year. The company foresees EBITDA from its energy transition business to range between 10% and 15% by the end of the current decade.