Tenaris acquires Benteler, OCTG buyers fret

Benteler North America Corporation and Tenaris SA have entered into a contract for the acquisition of Benteler’s Shreveport, Louisiana, OCTG manufacturing facility, at a price of $460 million.

The closing is expected in the fourth quarter. The deal includes $52m in working capital and is debt and cash-free, Kallanish reports.

The Benteler Steel & Tube facility in Shreveport was revamped in 2020 and has the capacity to roll roughly 400,000 tonnes per year.

“It is part of our corporate culture to constantly evolve. The sale of the steel tube plant in Shreveport makes the Benteler Group even stronger, more flexible, and financially more resilient. Today, the Shreveport plant is one of North America’s most modern and efficient steel tube plants. The plant is thereby able to realize its full potential in the context of the strong oil and gas market in the US,” Ralf Göttel, ceo of Benteler Group, says in a press release.

The acquisition is still subject to regulatory approval, including US antitrust authorities and Louisiana Economic Development.

“Tenaris has great relationships with the large-cap indies. They’re going to tie up this mill providing for those guys with their products, and the rest of OCTG will feel the shortage,” a buy-side source says. “This is a strategic buy to increase capacity for Tenaris.”

Currently, the price of representative OCTG product P110 5.5” diameter ranges from $3,250-$3,550/short ton, ex-works, domestic mill.

Kristen DiLandro USA