ArcelorMittal Secures Stake in Vallourec
Synopsis:
ArcelorMittal acquires a 28.4% equity interest in Vallourec, a leading provider of premium tubular solutions, for approximately €955 million. This strategic investment aims to bolster ArcelorMittal's presence in the downstream tubular market, particularly in low-carbon energy sectors like hydrogen and carbon capture, aligning with Vallourec's robust growth potential.
Article:
In a significant move, ArcelorMittal announces the acquisition of 65,243,206 shares, equivalent to approximately 28.4% equity interest in Vallourec, from Funds managed by Apollo Global Management, Inc., for €14.64 per share, totaling around €955 million. This transaction is pending regulatory approvals and is slated to conclude in the latter half of the year.
Vallourec, renowned for its premium tubular solutions, presents an enticing opportunity for ArcelorMittal to expand its footprint in the downstream tubular market. With a focus on energy transition, Vallourec serves diverse sectors such as energy, automotive, and construction, offering innovative and competitive products.
With 85% of Vallourec's annual rolling capacity concentrated in low-carbon production hubs in the US and Brazil, strategic markets for ArcelorMittal, the acquisition aligns with ArcelorMittal's sustainability goals and commitment to reducing carbon emissions.
Vallourec reported robust financials in 2023, with an EBITDA of €1.2 billion on sales of €5.1 billion. Its projected growth in the energy transition business, estimated at 10 to 15% by 2030, underscores its pivotal role in emerging sectors like hydrogen and carbon capture.
Aditya Mittal, CEO of ArcelorMittal, emphasizes Vallourec's significance in the energy transition, citing its critical role in producing essential products for hydrogen, CCS, and geothermal applications. The acquisition underscores ArcelorMittal's commitment to sustainability and its vision for Vallourec's future growth.
Vallourec's steelmaking facilities in Brazil and the US boast low carbon emissions, with ambitious targets to further reduce CO2 intensity by 30% in 2030 and 35% in 2035. This aligns with ArcelorMittal's sustainability agenda and reinforces its dedication to environmental stewardship.
Conclusion:
ArcelorMittal's acquisition of a strategic stake in Vallourec marks a significant milestone in its pursuit of sustainable growth and leadership in the tubular solutions market. With Vallourec's strong presence in low-carbon energy sectors and its ambitious sustainability targets, the partnership sets a promising trajectory for advancing clean energy initiatives and driving environmental stewardship.
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