Sumitomo Metals Strengthens Its Ties with Vallourec Accelerating Seamless Pipe Strategy

Sumitomo Metal Industries, Ltd. (Sumitomo Metals) and Vallourec S.A., headquartered in France, announced that they have agreed on arrangements intended to strengthen their respective positions in the premium joint business in the U.S. Specifically, they will merge two premium joint companies, VAM USA Company (VAM USA) and V&M Atlas Bradford LLC (Atlas Bradford), to establish a new premium joint threading joint venture owned by Vallourec, Sumitomo Metals, and Sumitomo Corporation. The name of the merged entity is VAM USA LLC. By strengthening the premium joint business, Sumitomo Metals aims to make a further leap forward in the pipe and tube business.

Sumitomo Metals and Vallourec have been working together for more than 30 years on the world-renowned VAM® premium joint. The two companies are currently constructing an integrated seamless pipe steelworks in Brazil, as a joint venture. They also cooperate in managing premium joint threading companies not only in the U.S., but in China, Indonesia, and Vietnam as well.

Sumitomo Metals and Vallourec will deepen their cooperative relationship in technological development and production in order to raise their respective corporate value. As a sign of the continuous cooperation, both companies have agreed on a program in which they will purchase each other's common stock.

Leveraging its partnership with Vallourec, Sumitomo Metals aims to extend its global steel development reach, accelerate its distinctiveness, and raise its corporate value.

1. Overview of the merger

2. Mutual Investment by Sumitomo Metals and Vallourec
Sumitomo Metals and Vallourec have agreed to purchase shares of common stock of the other party, worth $120 million, from their respective markets by December 31, 2009.

Summary of mutual share purchases

Basic corporate information