Boulogne-Billancourt, 2nd July 2007 –
Salzgitter AG and Vallourec have signed on 22 June 2007 a definitive agreement
regarding the sale to Salzgitter of Vallourec Précision Etirage (VPE), France,
a 100% subsidiary of Vallourec. Since all the conditions precedent have been
met, in particular the obtaining on 26 June 2007 of clearance from the European
competition authorities, the transaction will be carried out and effective as
from 2 July 2007. From that date the company VPE will be consolidated from
Vallourec’s financial statements and consolidated to Salzgitter’s.
VPE’s cold finishing operations will
complement Salzgitter’s existing precision tubes activities operated by its German
subsidiary MHP Mannesmann Präzisrohr (MHP) and its Dutch subsidiary, Mannesmann
As initially planned, Salzgitter also acquired
from Vallourec the German hot-rolling tube mill in Zeithain (Saxony), thus
enabling the combined businesses of MHP , ROB and VPE to be largely autonomous regarding
their supply of seamless tubes hollows as feed stock.
VPE is specialized in the manufacture of cold
drawn precision tubes. In 2006, VPE sales reached € 220 million, two third
being dedicated to the automotive industry and one third to other specific
industrial applications. The VPE operations include five production plants in
France and employ 1,210 people.
Zeithan, which employs 350 people, was already
supplying MHP, ROB and VPE with hollows. Its annual output if 170,000 tonnes
might exceed 200,000 tonnes in the mid term.
When they announced their preliminary agreement
on 13 December 2006, Salzgitter and Vallourec together outlined their
conviction of the need for consolidation in the European precision tube market.
The integration of VPE into Salzgitter’s
existing precision tubes activities will expand the future potential for the combined
entities. Whilst MHP has a strong German client base, VPE enjoys an excellent
market position in France. Additionally, the transaction shall generate
considerable industrial and R&D synergies.