(Reuters) -Steelmaker ArcelorMittal said on Tuesday it will acquire a 28.4% stake in Vallourec for around 955 million euros ($1.04 billion) to increase its exposure in the tubular business.
ArcelorMittal, the world's second-largest steelmaker, said it signed an agreement with funds managed by Apollo Global Management to buy 65.24 million shares in the France-based company for 14.64 euros apiece.
The Luxembourg-based holding company does not intend to launch a tender offer for Vallourec's remaining shares over the next six months, it added.
"As a producer of premium tubular solutions, it (Vallourec)has a critical role to play in the energy transition, producing vital products for hydrogen, CCS and geothermal applications, for which demand is expected to grow... We look forward to being part of the company's future," Aditya Mittal, CEO of ArcelorMittal said.
Vallourec, which specializes in the production of seamless and welded steel tube products for industrial applications, said it expects to generate strong EBITDA for the full year due to robust tubes pricing in backlog and operational improvement.
ArcelorMittal considered a potential offer for U.S. Steel Corp last year, Reuters had reported.
($1 = 0.9152 euros)