06:36 AM EDT, 03/13/2024 (MT Newswires) -- Apollo Global Management ( APO ) agreed to sell its minority stake in French tubular steel products manufacturer Vallourec to ArcelorMittal ( MT ) in a deal worth roughly 955 million euros ($1.04 billion).

Under the terms, the Luxembourg-based steel maker will purchase about 65.2 million shares, or a 28.4% interest, in Vallourec from funds managed by Apollo for 14.64 euros apiece, the companies announced in separate late Tuesday statements. ArcelorMittal's ( MT ) US-listed shares declined 1.9% in premarket trading Wednesday, while Apollo edged down 0.3%.

The transaction, which requires approval from regulators, is expected to close in the second half. The proposed sale will mark the exit of Apollo's investment in Vallourec, after leading the French company's financial restructuring and becoming its largest equity investor in 2021.

"We're proud of the extremely strong results achieved during our funds' ownership as the company transformed its operations," Apollo Partner Gareth Turner said. "There is still considerable potential to expand upon what we have achieved but it is now appropriate for Apollo to transition our funds' shareholding to an industrial partner."

The acquisition offers ArcelorMittal ( MT ) an opportunity to increase its exposure to the downstream, value-added tubular market, according to the company. ArcelorMittal ( MT ) said it doesn't plan to launch a tender offer for the remaining shares of Vallourec in the next six months.

"Vallourec is a quality, high added-value tubular business, with established positions of strength in the attractive Brazilian and US markets," ArcelorMittal ( MT ) CEO Aditya Mittal said. "It also has a comparatively low carbon footprint with ambitious improvement targets."

For full-year 2023, Vallourec reported sales of 5.1 billion euros and earnings before interest, taxes, depreciation and amortization of 1.2 billion euros. The company anticipates EBITDA from the energy transition business to reach between 10% and 15% by 2030.

"With Apollo's funds' assistance, we have fundamentally changed the operational and financial structure of Vallourec and we believe we are on the right trajectory to deliver enhanced shareholder value over the coming years," according to Vallourec Chief Executive Philippe Guillemot.

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