Economy

Japanese Sumitomo Purchases Edgen Group
Written by Sandy Williams
October 3, 2013
Specialty pipe maker Edgen Group Inc., based in Baton Rouge, has been purchased by Japan-based Sumitomo Corporation for $12 per share. The acquisition is valued at $520 million and is expected to close by the end of the year.
“The investment in Edgen Group will represent further expansion of Sumitomo’s distribution presence across the upstream, midstream, and downstream oil and gas markets, and other related energy and infrastructure segments and will complement Sumitomo’s integrated supply solutions to the growing energy market,” said Kazuhiro Takeuchi, President and CEO, SCOA and SC General Manager for the Americas.
Edgen is comprised of two divisions: Edgen Murray and Bourland& Leverich. Edgen Murry is a global distributor of specialized steel products for offshore drill, transportation and storage of oil and natural gas and refining. Bourland & Leverich is a domestic OCTG distributor supporting conventional and unconventional oil and natural gas exploration.
Including assumption of Edgen’s debt, the value of the Sumitomo purchase comes to $1.2 billion.
Iron Angels of Colorado CEO Peter Brebach commented on the acquisition, “Do the Japanese know something we don’t?” He pointed out the following to SMU, “This being the second sizeable OCTG distribution business acquired by a Japanese trading company in the past 4 weeks, one has to wonder. For the record, Sumitomo, to my knowledge, already owns 3 sizeable pipe, valves and fittings distributors in the US (Texas), so this is not totally new to them. They are also related to the recently merged Sumitomo/Nippon Steel steel mill, which has substantial pipe making capacities, including high-grade OCTG (chrome-bearing), which they will probably now sell through Edgen only.”

Sandy Williams
Read more from Sandy WilliamsLatest in Economy

ISM September survey captures deepening manufacturing gloom
The Institute for Supply Management’s (ISM) latest monthly report on manufacturing reflects a bleak view of American industry in September.

Key industries concerned over government shutdown’s impact on steel, manufacturing
Trade groups cautioned that a prolonged shutdown could strain US industry.

Chicago Business Barometer catches cold winds of contraction in September
The Chicago Business Barometer's September reading indicates a softening in overall business activity in the Midwest for the third consecutive month, with new orders and backlogs retreating further.

Metalforming market sentiment takes a dive in September: PMA
Metalforming manufacturers anticipate a decrease in near-term conditions, according to the Precision Metalforming Association's (PMA) Business Conditions Report for September.

AIA: Architecture firms still under pressure
Architecture firms reported a modest improvement in billings through August, yet business conditions remained soft, according to the latest Architecture Billings Index (ABI) release from the American Institute of Architects (AIA) and Deltek.