OREANDA-NEWS. Vallourec, world leader in premium tubular solutions, announces it finalized the merger of Vallourec Tubos do Brasil (VBR) and Vallourec & Sumitomo Tubos do Brasil (VSB) on 1 October 2016. Vallourec holds a majority stake of 84.6% in the new entity, called Vallourec Soluções Tubulares do Brasil, Nippon Steel & Sumitomo Metal Corporation (NSSMC) 15%, and Sumitomo Corp. 0.4%.

Following the merger, Vallourec Soluções Tubulares do Brasil will generate significant industrial and administrative synergies and will fully benefit from the optimal performance reached by VSB's state-of-the-art PQF® mill and premium finishing facilities, making it a highly competitive production hub.

NSSMC will keep its present purchase agreement for 300kt of tubes per year to be manufactured in the Jeceaba plant. The new entity will be fully consolidated in Vallourec's financial statements as from 1 October 2016 and the interests held by NSSMC and Sumitomo Corp. will be recorded as non-controlling interests.

Commenting on this merger Philippe Crouzet, Chairman of the Management Board said: "The successful merger of VBR and VSB is an important step in the development of a highly competitive production hub in Brazil. Vallourec Soluções Tubulares do Brasil will serve its domestic customers as well as its worldwide customers with high-end products and solutions. It also highlights the strong and fruitful partnership between Vallourec and NSSMC."

This merger is part of Vallourec's global Transformation Plan announced early February 2016 which aims at enhancing the Group's competitiveness and driving Vallourec's return to solid profitability and cash generation.

Vallourec is a world leader in premium tubular solutions for the energy markets and for demanding industrial applications such as oil & gas wells in harsh environments, new generation power plants, challenging architectural projects, and high-performance mechanical equipment. Vallourec's pioneering spirit and cutting-edge R&D open new technological frontiers. Operating in more than 20 countries, its 20,000 dedicated and passionate people work hand-in-hand with their customers to offer more than just tubes: they deliver innovative, safe, competitive and smart tubular solutions, to make every project possible.