Vallurek
American investment fund Apollo is selling 28.4% of its holdings to the steelmaker, making it the largest shareholder of the seamless tube champion.
Businessman as reference shareholder. Valorek, one of the world leaders in seamless tubes, couldn’t dream of better. It recently announced the entry of ArcelorMittal into its capital. The latter buys back 28.4% held by American investment fund Apollo (the balance is floating) for 955 million euros. A little less than the current share price, Vallourec, like other companies, has seen a significant increase in its price, especially through the publication of good results for 2023. ArcelorMittal will also have two representatives on the Vallourec board of directors, thus replacing Apollo.
Apollo entered Valorek’s capital through debt recovery operations in 2021. At that time the group was in the process of financial restructuring. Since then, Philippe Guillemot, who arrived at the head of Valorac in March 2022, has clearly raised the bar. Apollo had the opportunity to undertake a very good financial transaction, the amount of which, after participating in the restructuring of Vallurek, has not been communicated.
The entry into the capital of ArcelorMittal, the CAC 40 group, headquartered in London, but with very strong French roots, reinforces Philippe Guillaumet’s strategic choices. Buying his stake in Valorek’s capital allowed him to gain a foothold in a business he was not yet present in: advanced steelmaking with a seamless tube business. The latter, essential for the exploitation of hydrocarbons, is now shaping the future in the energy transition: hydrogen storage, CO2 capture and geothermal energy.
Six months without a takeover bid
ArcelorMittal has pledged not to launch a takeover bid for Valorac for at least the next six months. “The time horizon of an entrepreneur is different from that of a financial investor», recalls Philippe Guillemot, who remains CEO of Vallourec with the support of his new main shareholder.
The steel and mining expertise of the two groups are complementary. The merger should allow ArcelorMittal to strengthen its expertise in downstream applications. It is also part of the steel giant’s strategy to strengthen its position in decarbonisation and energy transition.
The operation, which has not yet received the green light from competition authorities, should be completed in the second half of 2024.
