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ArcelorMittal to Acquire Two Steel Tube Businesses from Vallourec

07/23/2007 - ArcelorMittal reaches a preliminary agreement to acquire two French-based steel tube businesses from Vallourec: Vallourec Précision Soudage, which produces welded steel tubes for automotive applications, and Vallourec Composants Automobiles Vitry, which specializes in the design and manufacture of tubular components for the automotive industry.

ArcelorMittal has reached a preliminary agreement to acquire two steel tube businesses from Vallourec. The company says the agreement forms part of its strategy to expand its business in the automotive sector, and to further strengthen the company's pipes and tubes business.
 
Both businesses enjoy strong positions in the European steel tubes market. Vallourec Précision Soudage (VPS) produces about 100,000 tonnes of welded steel tubes for application in the automotive industry from two sites in France. Also based in France, Vallourec Composants Automobiles Vitry (VCAV) specializes in the design and manufacture of tubular components for the automotive industry.
 
Combining them with the company's existing pipes and tubes business will allow ArcelorMittal to offer an even-more-complete range of products to its automotive customers.
 
"The planned acquisition of these businesses is complementary to the leading position of ArcelorMittal in the automotive business,” said Mr. Malay Mukherjee, a member of ArcelorMittal's Group Management Board. “It will enable us to strengthen our automotive products portfolio, especially in precision tubes and tubular automotive components by adding these new European facilities to our existing North American and European assets. The acquisition will also broaden our tube-related R&D capabilities. VPS and VCAV will also benefit from being part of the largest steel company, through significant commercial synergies and sharing of knowledge from across the group. "
 
The acquisition will be presented to the relevant employee representative bodies for consultation. Completion of the transaction is conditional upon a clearance decision by the competent competition authorities.
ArcelorMittal is the world's largest steel company, with 320,000 employees in more than 60 countries. The company, which brings together the former Arcelor and Mittal Steel, is a leader in a number of major global markets, including automotive, construction, household appliances and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks. An industrial presence in 27 European, Asian, African and American countries exposes the company to all the key steel markets, from emerging to mature, positions it will be looking to develop in the high-growth Chinese and Indian markets.
 
ArcelorMittal’s key pro-forma financials for 2006 show combined revenues of USD 88.6 billion, with a crude steel production of 118 million tonnes, representing around 10% of world steel output.