Argentinian steelmaker Tenaris, the largest global producer of steel pipes for the oil industry, has announced that it has signed an agreement to acquire a 77.45 percent holding in PT Seamless Pipe Indonesia Jaya (SPIJ), an Indonesian OCTG processing business with heat treatment and premium connection threading facilities from the following companies; Indonesian pipe, metal and building group Bakrie & Brothers TbK, Green Pipe International Limited, a leading supplier of pipeline software solutions to the international oil and gas industry, and Indonesian steel mill Cakrawala Baru.
Accordingly, the cost of the acquisition is $73.5 million, with $24.9 million being payable as consideration for SPIJ's equity and $48.6 million as consideration for the assignment of certain sellers' loans to SPIJ.
SPIJ has an annual processing capacity of 120,000 mt and has had a technical and commercial alliance with Tenaris for more than a decade. SPIJ employs around 500 people and had revenues of approximately $140 million in 2008.
Tenaris CEO Paolo Rocca stated, "The investment we are making in Indonesia is aimed at consolidating our operations for the long term in a market with major players, where there is a high demand for premium products and LNG development. The Indonesian market is an important oil and gas producer, as well as a key global exporter of liquid natural gas."