AMSTERDAM: ArcelorMittal has announced the acquisition of a 28.4% stake in Vallourec, amounting to 65,243,206 shares, at a price of €14.64 per share. This deal, valued at approximately €955 million, was secured through a Share Purchase Agreement with Apollo Global Management, Inc. The transaction is pending regulatory approval and is anticipated to conclude in the latter half of the year.
Vallourec, having undergone a successful restructuring, has emerged as an attractive investment for ArcelorMittal to enhance its presence in the high-value tubular market. Vallourec is recognized for its premium tubular solutions catering to the energy sector and other demanding industries, with a focus on innovative and competitive products. Notably, 85% of Vallourec’s 2.2 million tonnes of annual rolling capacity is centered around eco-friendly production hubs in the US and Brazil, aligning with ArcelorMittal’s strategic interests.
For the year 2023, Vallourec reported an EBITDA of €1.2 billion from sales totaling €5.1 billion. The company forecasts a significant increase in EBITDA from its energy transition segment, projecting a rise to 10-15% by 2030, driven by the burgeoning markets of hydrogen, geothermal energy, and carbon capture.
ArcelorMittal has clarified that it does not plan to initiate a tender offer for the remaining shares of Vallourec in the upcoming six months..
Commenting, Aditya Mittal, CEO, ArcelorMittal, said: “Vallourec is a quality, high added-value tubular business, with established positions of strength in the attractive Brazilian and US markets. As a producer of premium tubular solutions, it has a critical role to play in the energy transition, producing vital products for hydrogen, CCS and geothermal applications, for which demand is expected to grow. It also has a comparatively low carbon footprint with ambitious improvement targets. We look forward to being part of the company’s future.”
Vallourec’s steel making facilities in Brazil and the US have low carbon emissions (North America steel production at 0.290 tCO2 per tonne of steel and Brazil steel production at 0.945 tCO2 per tonne of steel1), with an ambitious roadmap to reduce CO2 intensity (scope 1, 2 and 3 upstream) by 30% in 2030 and 35% in 2035 (vs 2021 baseline).