On September 15, Boulogne-Billancourt, France-based tubular producer Vallourec announced that it has reached an agreement to acquire 19.5 percent of Tianda Oil Pipe Company Limited (TOP), a Chinese seamless pipe manufacturer listed on the Hong Kong stock exchange, through a reserved capital increase. The transaction will amount to a value of approximately US$100 million and is expected to be finalized in early 2011.
According to a Vallourec statement, TOP has manufactured oil country tubular goods (OCTG) for the oil and gas sector since 1993, and in January this year started a new state-of-the-art PQF® seamless rolling mill with an annual capacity of 500,000 mt. TOP is part of Anhui Tianda Enterprise Co., Limited, based in Anhui Province.
The transaction is subject to the approval of TOP's shareholders and to final regulatory approvals by the Chinese and Hong Kong authorities.
China represents the second largest market in the world for OCTG after the United States, the company stressed in its statement, pointing out that, by acquiring an interest in TOP, Vallourec will increase and improve its presence in the Chinese OCTG market.
Philippe Crouzet, chairman of Vallourec's management board, stated, "Bringing together Tianda's newly-installed tube mill with Vallourec's OCTG sales footprint and advanced technology will allow both Vallourec and TOP to improve their respective competitiveness and take advantage of the rapid development of the Chinese market."