Boulogne-Billancourt, 23 May 2011 – Vallourec world leader in premium tubular solutions, todayannounced that it has reached an agreement to acquire Saudi Seamless Pipes Factory Company Limited "Zamil Pipes", the first processing company of seamless OCTG1 in Saudi Arabia.
Located in Dammam, Zamil Pipes is close to Vallourec's new VAM threading plant which is currently under construction and due to be commissioned in H2 2011. In complement to this project, the acquisition of Zamil Pipes will provide Vallourec with ready-to-run heat treatment capacity and threading facilities of up to 100 kt of pipe per year. With these two operations, Vallourec will reinforce its local presence in the Kingdom, through additional finishing capacities and reduced lead-times to serve the premium OCTG market in Saudi Arabia.
The Kingdom of Saudi Arabia, through its national oil company Saudi Aramco, is the world's largest oil producer and is one of Vallourec's main customers with growing requirements for premium OCTG.
Philippe Crouzet, Chairman of Vallourec's Management Board stated:
"With local heat treatment and premium threading facilities, Vallourec and Zamil Pipes will enjoy an unmatched competitive position. The combination of Vallourec's expertise in VAM premium OCTG technology and Zamil Pipes processing facilities will strengthen the local offer to serve Saudi Aramco and other customers in the Middle East."
Khalid Al Zamil, Chairman of Zamil Pipes and Executive Director of Zamil Group said: "We are proud to contribute to the local establishment of a world class premium OCTG supplier for the oil and gas industry in Saudi Arabia and wish Vallourec the best of success. This transaction sets the grounds for future developments to contribute to the national welfare of the Kingdom."
The transaction amounts to US $135 million, is subject to regulatory approvals and is expected to be finalized in Q2 2011.
1 OCTG = Oil Country Tubular Goods