Welspun To Acquire Saudi Pipe Firm
Welspun Corp Ltd, formerly Welspun-Gujarat Stahl Rohren Ltd, is acquiring majority stake in Aziz European Pipe Factory Llc, a Saudi Arabian pipe and pipe coating facility for an undisclosed sum. Aziz European Pipe manufactures pipes primarily for the oil & gas industry.
Welspun believes the acquisition will help it in providing a complete solution to the oil and gas majors and water companies in the GCC (Gulf Corporation Council) region, it said in a statement. The acquisition will be done though its subsidiaries, and is subject to the regulatory approvals.
Aziz European Pipe Factory is a JV company between the Saudi firm Aziz and the Forest Group, and is claimed to be one of the largest manufacturer of spiral submerged arc welded steel pipes in the Middle East. It has a production capacity of 2.7 lakh MTPA (million tonne per annum) of pipes. Its customers include Aramco, Royal Ductch Steel and Exxon Mobil.
Previous reports suggest that Aziz Pipe would hive off the assets into a separate entity, to be named Welspun Middle East post this acquisition. Welspun is picking up more than 50% stake in this company.
For Welspun, this would be its second investment overseas. Earlier in February 2009, it had invested in a 350,000 tonne facility in the US. It currently has a pipe manufacturing facility in Gujarat with a capacity of 1.65 million tonne.
The shares of the company were traded at Rs 278.40, up by Rs 7.10 or 2.62% at 11: 25 am in the BSE today. The net sales of the company was Rs 6626.71 crore in FY 2010, as compared with Rs 5896.19 crore a year ago. The net profit was Rs 540.2 crore against Rs 233.57 crore.