Tenaris has agreed to acquire a 47.79% shareholding in listed welded pipemaker Saudi Steel Pipe (SSP) for $144 million. The transaction is expected to be completed before 31 March 2019 subject to obtaining relevant regulatory approvals.

The Saudi steelmaker signed in May a non-binding memorandum of understanding to carry out talks on an acquisition by a strategic investor (see Kallanish passim).

“With this transaction, Tenaris will significantly expand its industrial presence in the Kingdom and the range of products it supplies to Saudi Aramco,” the global pipemaker says. “Since its first industrial investment in 2010, Tenaris has continuously invested to expand its local operations, supporting the industrialisation of the country.”

SSP is qualified to supply pipe to major national oil companies in the Middle East, including Saudi Aramco, with which it agreed a SAR 133m ($35.5m) pipe supply contract over the summer. Dammam-based SSP has a 360,000 tonnes/year high-frequency induction welded pipe production capacity. It also owns a 35% stake in Saudi large-diameter pipemaker Global Pipe Company (GPC). Tenaris, meanwhile, operates an OCTG threading unit, also in Dammam, which can produce up to 12,000 t/month.

SSP is 83.63%-owned by Saudi conglomerate Rabiah & Nassar Group, while Chinese pipemaker Hunan Standard Steel Co. (Hu Steel Co.) holds a 16.37% stake. It is unclear what these companies’ stakes will be following the sale to Tenaris.

SSP’s revenue in the first half 2018 rose 14.9% on-year to SAR 333.4m, although the firm posted a net loss of SAR 41.86m versus a profit last year of SAR 17.9m (see Kallanish passim). Exports accounted for 6.7% of H1 revenue.

Tenaris said last month it has secured a good share of upcoming gas expansion ventures in the Middle East. In H1 the firm’s Middle East & Africa segment’s net sales surged 64% on-year to $755m.