black and gray metal pipe
  • ArcelorMittal purchases 28.4% stake in Vallourec for €955 million
  • Deal aligns with strategic focus on downstream, value-added tubular market
  • Vallourec’s sustainable production capabilities complement ArcelorMittal’s strategic markets in the US and Brazil

London, United Kingdom – ArcelorMittal, a global leader in steel and mining, has announced a major stride in expanding its market presence by acquiring a substantial equity interest in Vallourec.

The company signed a Share Purchase Agreement to acquire 65,243,206 shares, which corresponds to approximately 28.4% of Vallourec’s equity.

This acquisition, valued at around €955 million, was facilitated through a purchase of shares at €14.64 per share from Funds managed by Apollo Global Management, Inc.

This strategic move is pivotal for ArcelorMittal, particularly given Vallourec’s recent successful restructuring. Vallourec, renowned for its premium tubular solutions, serves a diverse range of markets including energy, automotive, and construction. The company’s focus on innovative and competitive products, especially in the energy sector, aligns well with ArcelorMittal’s objectives.

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A significant aspect of this acquisition is Vallourec’s commitment to sustainability, with 85% of its 2.2 million tonnes annual rolling capacity centered around low-carbon, integrated production hubs in the US and Brazil. These locations are key strategic markets for ArcelorMittal, further underscoring the synergy of this acquisition.

In 2023, Vallourec reported robust financials with an EBITDA of €1.2 billion on sales of €5.1 billion. The company projects substantial growth in its energy transition business, anticipating EBITDA from this sector to reach between 10 and 15% by 2030. This growth is expected to be driven by the expanding hydrogen, geothermal, and carbon capture markets.

The transaction, subject to regulatory approvals, is slated for completion in the second half of the year. This acquisition marks a significant milestone in ArcelorMittal’s strategy, positioning it to capitalize on the growing and lucrative downstream tubular market.

This acquisition demonstrates ArcelorMittal’s commitment to expanding its footprint in the high-value tubular solutions sector, leveraging Vallourec’s innovative capabilities and sustainable production methods. The strategic positioning in key markets like the US and Brazil sets the stage for continued growth and success in the evolving global market.

By Lisa Luckas

Lisa Luckas is a Sr. Business News Editor at Nobot.News.

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