France-based pipe manufacturer Vallourec has announced that it has started exclusive negotiations with French specialty steel producer Ascometal Group for the sale of a majority holding in Vallourec’s Saint-Saulve tube mill in France, which has 320 employees. Negotiations are expected to be concluded with a final agreement being signed by the end of the current year.
According to Vallourec’s statement, at this stage in proceedings, the two partners envisage creating a joint venture with Vallourec holding a 40 percent stake and Ascometal having a 60 percent stake, thus giving the latter exclusive control of operations. At the outset, the steel purchase commitments made by the two parties in terms of the quantities of steel produced are 175,000 mt per year for Ascometal, and 100,000 mt per year for Vallourec. These volumes would secure the steel mill's long-term operations and competitiveness. Meanwhile, the negotiations also include the upgrade of existing equipment at Saint-Saulve in order to produce steel bars with varying diameters which would pave the way to accessing new markets, in particular in the automotive industry.