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3/25/2019  International steel co. Tenaris inks $1.2B deal for TMK's U.S. subsidiary


Luxembourg-based steel pipe manufacturer Tenaris SA (NYSE: TS), which has a Houston presence, will acquire Houston-based IPSCO Tubulars Inc. from Russia-based PAO TMK, according to March 22 press releases from the companies. 
The deal is for nearly $1.21 billion on a cash-free, debt-free basis, including $270 million of working capital, per the releases. The releases did not indicate when the deal is expected to close, but the deal is subject to regulatory approvals, including approval by the U.S. antitrust authorities, and other customary conditions.
The deal comes just over a year after IPSCO Tubulars postponed its initial public offering “due to adverse market conditions.”
IPSCO Tubulars produces and supplies seamless and welded tubular goods and other pipe products for onshore exploration and production, oil and gas transportation, and other uses. The company has production facilities throughout the U.S. and can produce up to 450,000 metric tons of steel bars, 400,000 metric tons of seamless pipe and 1 million metric tons of welded pipe annually. IPSCO Tubulars was a division of TMK IPSCO, which announced in 2012 that it would move its headquarters from Illinois to Houston.
The addition of IPSCO Tubular’s assets would give Tenaris a U.S. steel-bar production facility in Pennsylvania and complement the company’s seamless production in Bay City, south of Houston, with a second facility in Pennsylvania, per the release. It will also add welded, heat-treatment and finishing facilities to Tenaris’ portfolio. 
Most of Tenaris’ U.S. operations are concentrated in the Houston area, though it also has three manufacturing facilities in California, New Orleans and the Memphis, Tennessee, area, according to the company’s website. In addition to its $1.8 billion Bay City plant, which started up in 2017, Tenaris’ other Houston-area locations include a commercial office in town, a service center in Freeport, and five manufacturing facilities, per the website. Last year, Tenaris restarted part of its Conroe plant and restored 100 full-time jobs. 
“Over the past 15 years, we have been expanding our manufacturing presence and positioning in the U.S. market,” Paolo Rocca, chairman and CEO of Tenaris, said in his company’s March 22 release. "This acquisition would mark a further step in our journey as a domestic producer and supplier to the U.S. oil and gas industry."