ArcelorMittal S.A.: ArcelorMittal completes acquisition of strategic stake in Vallourec
Rhea-AI Summary
ArcelorMittal has completed the acquisition of a 28.41% stake in Vallourec for approximately €955 million, purchasing 65,243,206 shares at €14.64 per share from Apollo Global Management funds. This strategic move strengthens ArcelorMittal's position in the high-quality tubular products market, with potential growth in clean energy sectors. Following the acquisition, ArcelorMittal executives will join Vallourec's board, including Genuino Magalhaes Christino as director, Keith Howell as director, and Aditya Mittal as observer.
CEO Aditya Mittal emphasized that this acquisition aligns with ArcelorMittal's growth strategy, complementing recent successful acquisitions in Brazil and the US. The company does not plan to launch a tender offer for Vallourec's remaining shares in the next six months.
Positive
- Acquisition of 28.41% stake in Vallourec for €955 million, expanding ArcelorMittal's market presence
- Strategic entry into high-quality tubular products market with growth potential in clean energy sectors
- Appointment of ArcelorMittal executives to Vallourec's board, increasing influence in company decisions
- Aligns with ongoing growth strategy, complementing recent successful acquisitions in Brazil and US
Negative
- Significant capital outlay of €955 million for minority stake
- No immediate plans for full acquisition, limiting potential synergies and control
Insights
ArcelorMittal's acquisition of a 28.41% stake in Vallourec for
The deal's financial impact is notable, representing about
The no-tender offer commitment for six months suggests a strategic rather than takeover approach, which may be viewed positively by the market as it limits immediate financial exposure while allowing for potential future expansion.
This acquisition aligns with global energy transition trends, potentially positioning ArcelorMittal to capitalize on the growing demand for tubular products in renewable energy infrastructure. The move could enhance the company's product portfolio diversification and provide a competitive edge in emerging markets.
Investors should consider the long-term growth potential in clean energy markets and how this stake in Vallourec might strengthen ArcelorMittal's value proposition in these sectors. The appointment of key ArcelorMittal executives to Vallourec's board suggests a hands-on approach to strategic alignment and potential for operational synergies.
However, it's important to monitor integration challenges and how effectively ArcelorMittal leverages this investment to drive growth in new markets while maintaining focus on its core steel business.
The completion of this acquisition following antitrust approvals and foreign investment clearances indicates a thorough regulatory process. This suggests minimal legal risks associated with the transaction. The explicit statement about not launching a tender offer for the next six months is a important legal commitment, providing clarity to the market and potentially preempting regulatory scrutiny.
The appointment of ArcelorMittal executives to Vallourec's board raises considerations about corporate governance and potential conflicts of interest. Investors should monitor how these appointments influence decision-making and ensure compliance with relevant corporate laws and regulations.
ArcelorMittal's commitment to inform the market of any changes in its intentions regarding further acquisitions demonstrates transparency and compliance with disclosure requirements, which is positive from a legal and investor relations perspective.
06 August 2024, 07:30 CET
ArcelorMittal today announces that following the signature of a Share Purchase Agreement on 12 March 2024, and after the approval of relevant antitrust authorities and clearances under foreign investment regulations, it has completed the acquisition of 65,243,206 shares, representing c.28.41% equity interest in Vallourec, for
Following completion of this transaction, the appointment of Mr. Genuino Magalhaes Christino (Chief Financial Officer, ArcelorMittal) as director of Vallourec will become effective, Keith Howell (Chief Operating Officer, ArcelorMittal USA) will be appointed as director of Vallourec, and Aditya Mittal as observer of Vallourec, subject to successful completion of the settlement.
ArcelorMittal does not intend to launch a tender offer for Vallourec’s remaining shares over the next six months and will inform the market should this intention change.
Commenting, Aditya Mittal, CEO, ArcelorMittal, said:
“Vallourec is well established as a producer of high-quality tubular products, holding a prime position in an attractive market segment that has potential for growth from new, clean energy markets. The strategic stake is a welcome addition to our investment portfolio, and we look forward to supporting Vallourec’s management team in their efforts to drive further performance improvement.
“It also supports our ongoing efforts to grow our business. The acquisitions we have made in recent years in Brazil and the US are performing well and progress with our suite of organic growth projects continues apace, with several due to complete this year. These initiatives will significantly strengthen our business, expanding our product capabilities and emerging markets exposure while enhancing our earnings capacity.”
ENDS
About ArcelorMittal
ArcelorMittal is one of the world’s leading integrated steel and mining companies with a presence in 60 countries and primary steelmaking operations in 15 countries. It is the largest steel producer in Europe, among the largest in the Americas, and has a growing presence in Asia, including India, through its joint venture AM/NS India.
ArcelorMittal sells its products to a diverse range of customers including the automotive, engineering, construction and machinery industries, and in 2023 generated revenues of
Our purpose is to produce smarter steels for people and planet. Steels made using innovative processes which use less energy, emit significantly less carbon and reduce costs. Steels that are cleaner, stronger and reusable. Steels for the renewable energy infrastructure that will support societies as they transform through this century. With steel at our core, our inventive people and an entrepreneurial culture at heart, we will support the world in making that change.
ArcelorMittal is listed on the stock exchanges of New York (MT), Amsterdam (MT), Paris (MT), Luxembourg (MT) and on the Spanish stock exchanges of Barcelona, Bilbao, Madrid and Valencia (MTS). For more information about ArcelorMittal please visit: http://corporate.arcelormittal.com.
| Contact information ArcelorMittal Investor Relations | |
| General | +44 20 7543 1128 |
| Retail | +44 20 3214 2893 |
| SRI | +44 20 3214 2801 |
| Bonds/Credit | +33 171 921 026 investor.relations@arcelormittal.com |
| Contact information ArcelorMittal Corporate Communications | |
| Paul Weigh Tel: E-mail: | +44 20 3214 2419 press@arcelormittal.com |
1 Stake prior to preferred shares conversion into ordinary shares that will vest as a result of the completion of the Apollo block acquisition
FAQ
What percentage stake did ArcelorMittal acquire in Vallourec (MT)?
How much did ArcelorMittal (MT) pay for its stake in Vallourec?
Will ArcelorMittal (MT) launch a tender offer for remaining Vallourec shares?
Who will represent ArcelorMittal (MT) on Vallourec's board following the acquisition?
