After investing €955 million to become the leading shareholder of France’s Vallourec, a specialist in seamless tubes, ArcelorMittal “has no intention of launching a takeover bid in the next six months,” the world’s second-largest steelmaker announced on Tuesday.
ArcelorMittal confirmed on Tuesday that it had completed the operation launched on 12 March to buy 65.2 million Vallourec shares from the American fund Apollo. This represent 27.5% of the French company’s capital and 28.4% of its voting rights.
“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,” the two companies said in separate statements.
The shareholder agreement between Vallourec and the Apollo fund has been terminated, and a new shareholder agreement has been concluded between Vallourec and ArcelorMittal. This will see ArcelorMittal-appointed directors join Vallourec’s board, among them Genuino Magalhaes Christino, a member of the audit and remuneration committees.
Subject to the successful completion of the settlement, ArcelorMittal’s CEO, Aditya Mittal, will become observer of Vallourec, replacing Apollo-designated observer Austin Anton, while Keith James Howell will fill the director slot in place of Gareth Turner.
The shares of ArcelorMittal and Vallourec reacted positively on the Paris Stock Exchange on Tuesday following these announcements.
Vallourec, a supplier to the oil and gas industry, returned to profitability last year following a radical restructuring that involved shutting down its German factories and cutting 3,000 jobs, a move that led to its best results in 15 years and a significant reduction of its debt.
