Vallourec continues to implement its strategic plan with the arrival of ArcelorMittal, new reference shareholder

Meudon (France), March 12th, 2024. Vallourec, a world leader in premium tubular solutions, announces today that ArcelorMittal has reached an agreement to purchase Apollo’s stake in Vallourec (65,243,206 shares) representing 28,4% of the voting rights and 27,5% of the share capital, at a price of €14,64 per share, for a total purchase price of €955 million. This marks the final step of the financial restructuring of Vallourec that was initiated in 2021, when Apollo became Vallourec’s reference shareholder. This new investment by a world-class industrial player speaks to the breadth of the operational turnaround executed since that time, as well as the robust outlook for the premium seamless tubes business over the coming years.

Vallourec welcomes the transition in reference shareholder from Apollo, the leader of Vallourec’s successful financial restructuring, to ArcelorMittal, a global steel industry player. ArcelorMittal is a world leader in steelmaking and mining, present in 60 countries and with primary steel production facilities in 15 countries. We are pleased with ArcelorMittal’s confidence in Vallourec’s new trajectory and success in executing a substantial strategic shift. It also represents a long-term commitment, as ArcelorMittal shares with Vallourec a common industrial vision and complementary, world-renowned expertise. ArcelorMittal will hold 28,4% of the voting rights and 27,5% of the share capital of the Company following the closing of the transaction.

This transaction was made possible by the New Vallourec plan, which was announced in May 2022 with the arrival of Philippe Guillemot as CEO. The New Vallourec plan, endorsed by Apollo since Philippe Guillemot’s arrival, has transformed the Group into a focused, streamlined, and resilient company with a promising future. Vallourec’s 2023 earnings were the best Group results in nearly 15 years, and the Group has reduced its net debt by more than €900 million versus third quarter 2022 peak. Vallourec remains on track to reach zero net debt by the end of 2025 at the latest and is undertaking several initiatives to continue to deliver enhanced shareholder value over the coming years.

Vallourec further reiterates its outlook given in its Fourth Quarter and Full Year 2023 Results press release. Based on current market conditions and management’s assumptions, Vallourec expects that Group EBITDA in the first half of 2024 will be broadly similar to second half 2023 EBITDA. For the full year, Vallourec anticipates strong EBITDA generation due to robust Tubes pricing in backlog and operational improvement. In keeping with prior years’ financial communication, Vallourec has not provided a quantitative full-year EBITDA outlook and expects it will provide such an outlook during the communication of its first half results. 

The completion of the acquisition is expected to close in the second half of the year, after obtaining the relevant regulatory approvals. Such acquisition will not entail a change of control of Vallourec and ArcelorMittal does not intend to launch a voluntary tender offer for Vallourec’s remaining shares over the next six months. Vallourec and ArcelorMittal will enter into discussions for a shareholders’ agreement which will contain customary provisions for such type of transaction, with 2 board seats for ArcelorMittal upon closing of the acquisition (subject to negotiations). In accordance with applicable law, the main terms of the shareholders’ agreement will be made publicly available in due course.