ArcelorMittal, a global steel giant, recently completed the acquisition of a 28.4% equity interest in Vallourec by purchasing over 65 million shares from funds managed by Apollo Global Management Inc. This transaction, valued at approximately €955 million, marked a strategic move for ArcelorMittal following the signing of a Share Purchase Agreement in March 2024. Genuino Magalhaes Christino, ArcelorMittal's chief financial officer, and Keith Howell, the chief operating officer of ArcelorMittal USA, are among the executives set to join Vallourec's board.
ArcelorMittal emphasized Vallourec's strong position in the market for high-quality tubular products, particularly within segments expected to experience growth driven by emerging clean energy markets. The company sees this acquisition as a valuable addition to its investment portfolio and is committed to supporting Vallourec's management team in driving improved performance. Furthermore, this move aligns with ArcelorMittal's broader growth strategy, reinforcing its investments in Brazil and the United States to strengthen its product capabilities, market presence, and earnings potential.
Looking ahead, ArcelorMittal revised its global steel consumption growth projection, excluding China, to 2.5-3% for 2024. The company also anticipates significant investments in strategic growth projects, with a focus on enhancing EBITDA and free cash-flow generation. As part of its growth initiatives, ArcelorMittal is driving progress on various organic growth projects expected to enhance its business by expanding product capabilities and increasing exposure to emerging markets. Additionally, the company highlighted its positive outlook on cash flow generation, supported by expected reversals in working capital investments by year-end.