Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

The US Department of Justice (DOJ) has cleared the acquisition of Texas-based steel pipe supplier, IPSCO Tubulars, by Tenaris. IPSCO supplies steel pipes for E&Ps and was spun out of Russia’s TMK. The final transaction is likely to be completed in January 2020. 


The stock purchase agreement to sell 100pc of the shares of IPSCO Tubulars Inc. for around $1.21bn was was first reached on March 22, 2019. The purchase pricce includes $270mn worth of working capital. Tenaris’ common stock price was $29.20 on the deal date but since then has fallen 22pc to $22.71 on Dec 31. TMK’s stock price dropped 8pc in the same period to $2.96 per share. The oil and gas pipe industry encountered weaker demand in 2019.


IPSCO Tubulars withdrew its plans for an initial public offering on April 12, 2019. It had filed to raise $500mn at a market cap of $1.3bn. The tubulars company hit sales of $1.4bn in 2018.  It is unclear if the lack of a successful IPO and declines in stock prices of tubular firms will impact the valuation of the initial agreement. TMK had not responded to Davis index’s query at time of publication. 


Tenaris is an international producer of seamless and welded pipe with expected net sales of $7.5bn in calendar year 2019. PAO TMK, a Russian company and manufacturer of steel pipe, has projected a revenue of $5bn for the full year 2019. Tenaris’s first seamless facility in the US started production at its TenarisBayCity, Texas facility in 2017.

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