ArcelorMittal, the world’s second-largest steelmaker, has completed its acquisition of 27.5% of Vallourec’s capital for 955 million euros, making it the French seamless tube specialist’s reference shareholder.
However, both companies announced on Tuesday that there are “no plans to launch a takeover bid in the next six months.”
ArcelorMittal Completes Acquisition, Excludes Immediate Takeover
ArcelorMittal confirmed on Tuesday the completion of the operation launched on March 12th, acquiring 65.2 million Vallourec shares from the American fund Apollo, representing 27.5% of the French company’s capital and 28.4% of its voting rights.
“ArcelorMittal does not intend to launch a public offer for the remaining Vallourec shares in the next six months and will inform the market if its intention changes,” the two groups stated in separate press releases.
New Shareholder Agreement and Board Representation
With the shareholder agreement between Vallourec and Apollo terminated, a new agreement has been established between Vallourec and ArcelorMittal. This includes the appointment of ArcelorMittal directors to Vallourec’s board, such as Genuino Magalhaes Christino, who will also serve on the audit and remuneration committees.
Aditya Mittal, CEO of ArcelorMittal, will be appointed as an observer by Vallourec’s board of directors, replacing Austin Anton, the observer appointed by Apollo. Keith James Howell will also join the board, replacing Gareth Turner.
Positive Market Reaction
Shares of ArcelorMittal and Vallourec reacted positively on Tuesday to these clarifications on the Paris Stock Exchange.
Vallourec’s Turnaround and Diversification Efforts
Vallourec, an equipment supplier for the oil and gas industry, returned to profitability last year following a restructuring plan that included closing its German factories and cutting 3,000 jobs. This led to the company’s best results in 15 years and a significant reduction in debt.
“Vallourec shares a long-term industrial vision with ArcelorMittal,” said Philippe Guillemot, Chairman and CEO of Vallourec.
The French group is seeking to diversify into the energy transition and industrial decarbonization markets, particularly through green hydrogen storage technologies, CO2 capture, and geothermal energy.
Shared Interest in Decarbonization
These areas are also of interest to ArcelorMittal, which is working to decarbonize its steel production sites by capturing CO2 and establishing facilities where coal will be replaced by hydrogen to reduce the amount of iron ore needed for steelmaking.