ArcelorMittal SA agreed to buy an equity stake worth $1.04 billion (€955 million) in tubular steel company Vallourec SA as it seeks to boost its exposure to more value-added products.
ArcelorMittal said late Tuesday it signed a share purchase agreement to acquire a 28% equity interest in Vallourec from funds managed by Apollo Global Management Inc.
The French steel tube maker supplies products for the energy and industrial sectors, including automotive and construction customers, with the majority of its capacity in the US and Brazil, according to the statement.
“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,” ArcelorMittal Chief Executive Officer Aditya Mittal said in the statement.
Apollo Global became a key stakeholder in Vallourec in 2021 as it faced restructuring. In September 2023, the French company said it would resume paying dividends as early as 2025 as it seeks to erase its net debt. The company befitted from a rebound in crude costs and drilling tube prices after the Covid pandemic and years of spending cuts from hydrocarbon producers.
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