ArcelorMittal Tubular Products Jubail closes acquisition of JESCO
ArcelorMittal announced that its Saudi Arabian joint venture with the Public Investment Fund ArcelorMittal Tubular Products Jubail has completed the acquisition of Jubail Energy Services Company from TAQA Industrialization and Energy Services Company. ArcelorMittal Tubular Products Jubail incoming CEO Gabriel Monti said “Combining AMPTJ with JESCO creates a new regional champion capable of delivering first-class products and services to our expanded customer base. We fully intend to capture the synergies resulting from this transaction which will further strengthen our competitiveness. I would like to thank all employees from both companies for the patience and commitment they have shown throughout the transaction process. Their professionalism has been exemplary, and I am confident they will feel tangible benefits from this transaction. I’d also like to thank the Ministry of Investment of Saudi Arabia for the enabling role it played in facilitating this transaction.”
AMTPJ and JESCO will continue to remain independent of one another, although opportunities to reduce costs through shared services (such as IT and Finance) will be explored in the coming weeks and months.
The transaction brings multiple benefits for all stakeholders in the Kingdom of Saudi Arabia, including ArcelorMittal Tubular Products Jubail customers such as Saudi Aramco, as well as both shareholders. These include:
Economies of scale through the creation of the largest producer of seamless pipes in the Middle East
Combined annual capacity of 1 million tonnes and a highly diversified quality product offering
The opportunity to derive synergies and improve cost competitiveness across multiple areas including raw material procurement, sales and marketing logistics, inventory optimisation and asset utilisation.
Strengthened financial position and shareholder base in partnership with PIF
ArcelorMittal’s shareholding in ArcelorMittal Tubular Products Jubail, which will operate under the joint management control of ArcelorMittal and PIF, will reduce to approximately one-third from 41% with PIF’s shareholding correspondingly increasing to approximately two-thirds.