Russian steel pipe manufacturer TMK has finalized a deal to sell its U.S. subsidiary IPSCO Tubulars to global producer Tenaris, Kommersant reports.
“The final amount paid in cash, following contractual adjustments, was US$1,067 million (including approximately $220 million in working capital),” Luxembourg-based giant Tenaris said in a statement.
Under the deal, starting from January 2, 2020 Tenaris will be the exclusive distributor of TMK’s OCTG and line pipe products in the United States and Canada for six years.
The transaction on sale of IPSCO Tubulars to Tenaris for $1.2 billion was announced in March last year. The companies hoped to close the deal by the end of 2019, but the U.S. Department of Justice did not clear the acquisition until late December.
IPSCO Tubulars has pipe production facilities in the U.S. and Canada. After closing the deal, TMK’s management plans to revise its dividend policy stipulating that the company pays at least 25% out of consolidated net profit according to the International Financial Reporting Standards. This decision is aimed at making it “more stable and predictable.”
TMK is a major Russian manufacturer and supplier of steel pipes for oil and gas industry, which is ranked among top three global leaders in this sector. Dmitry Pumpyanskiy, Chairman of TMK, owns 65.05% of the company through TMK Steel Holding Ltd.
