Tenaris announced on January 21st that it closed its previously-announced acquisition from a private group of 47.79% of the shares of Saudi Steel Pipe Company (SSP), a welded steel producer listed on the Saudi stock market, for a total amount of SAR 529.8 million (approximately US$141 million).
SSP’s facilities are located in the Eastern Province of the Kingdom of Saudi Arabia (KSA) and have a manufacturing capacity of 360,000 tons per year. The company, which started its operations in 1980 and serves energy, industrial and commercial segments, is qualified to supply products with major national oil companies in the region, including Saudi Aramco.
Tenaris will begin consolidating SSP’s results from January 21, 2019 and together will have more than 1,000 employees in Saudi Arabia. Tenaris has been serving the Saudi market for decades, and the combined portfolios coupled with the strengthened technical capabilities will allow Tenaris to better meet customers’ requirements.
The result of the transaction is expected to expand Tenaris’s industrial presence in Saudi Arabia, one of the largest markets for OCTG and line pipe products, and the range of products it supplies to Saudi Aramco. Since its first industrial investment in Saudi Arabia in 2010, Tenaris has continuously invested in the expansion of its local operations, supporting the industrialization of the country.
“The official integration of Saudi Steel Pipe into Tenaris marks an important step to further expand the company’s footprint and capabilities in Saudi Arabia,” said Mariano Armengol, who has been appointed as Managing Director and Chief Executive Officer for SSP. “I would like to recognize the efforts of both Tenaris and SSP teams who contributed to the successful closing of this acquisition. We are very positive to what the future holds in terms of business growth and people development.”
Commenting on the acquisition, Ahmed Al-Debasi, SSP’s former Managing Director and newly appointed Chairman of the Board of Directors said: “We are pleased to join Tenaris, a global leader who shares our industrial legacy, our commitment to customers and our willingness to contribute to Saudi Arabia’s oil and gas development. The integration will strengthen our technical capabilities, allowing us to better meet customer requirements and become an industrial hub for the region.”
SSP operates five pipe production lines, covering an outside diameter range from ½” to 20” outside diameter which complements Tenaris’s existing offering in Saudi Arabia.
Tenaris’ premium OCTG threading facility in Dammam covers a range from 4 ½” to 14” for the threading of full length pipes and accessories, with an annual capacity to produce 120,000 tons.
The combined portfolio will provide Saudi Aramco and regional customers with a comprehensive range of products, that includes welded pipes, commercial pipes and a full range of line pipes, as well as expanded services offer incorporating coating and bending.
Some of the statements contained in this press release are “forward-looking statements”. Forward-looking statements are based on management’s current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements.
Tenaris is a leading global supplier of steel tubes and related services for the world’s energy industry and certain other industrial applications.