Turkey’s largest steel pipe producer Borusan Mannesmann’s fully owned US subsidiary, Borusan Mannesmann Pipe US Inc., has started negotiations with German steel pipe producer Europipe GmbH on the acquisition of all issued and outstanding shares of capital stock in Europipe’s US subsidiary, Berg Europipe Holding Corp, Borusan said March 16.
According to a regulatory filing March 16 seen by S&P Global Commodity Insights, a non-binding letter of intent was signed between the parties on March 2 and the necessary negotiations for a binding agreement between the parties are ongoing in this context.
“In the meantime, the necessary financial and legal studies within the scope of the process and the required procedures before the regulatory authorities are being carried out,” Borusan said.
Europipe, headquartered in Ruhr, Germany, has production facilities for longitudinal seam-welded large-diameter pipes in Mulheim, Germany and in Panama City, US, named as Berg Pipe Panama.
The company’s second plant in the US, Berg Pipe Mobile, for helically welded pipes, also started production at the end of 2008 in Mobile, Alabama.
Borusan Mannesmann’s ERW pipe mill in Baytown, Texas, has a 300,000 mt/year capacity. The company already started an investment last year to raise its US mill capacity to 400,000 mt/year with new lines.
Borusan Mannesmann’s Turkish mill capacities are 750,000 mt/year of ERW pipes and 300,000 mt/year of spiral pipes. The company’s capacity to produce cold-drawn special pipe at its Vobarno plant in Italy is 28,000 mt/year.
Fluctuations in raw material prices have been putting pressure on steel pipe producers’ pricing, sources said.
Turkish hot-rolled coil prices exceeded $1,200/mt mid-March 2022, but have declined since April, with Platts, part of S&P Global Commodity Insights, last assessed domestic HRC at $845/mt EXW March 10.
— Cenk Can
