Vallourec Tubos and VSB to merge activities in Brazil due to the unfavorable economic situation.

Vallourec Tubos do Brazil (VBR) announced today (February 16) the merger of their business with VSB, which has Nippon Steel & Sumitomo Metal Corporation (NSSMC) as a partner. With the merger of the companies, Vallourec SoluçõesTubulares do Brasil was formed, which will still require the approval of the antitrust agency Cade to have its our creation official.

Vallourec explained that the decision was taken in the light of the economic crisis in the country and the fall in oil prices. With the merger, in addition to the scheduled shutdown of the Alto-Forno II (blast furnace where pig iron is cast) this year, the shutdown of the Altop Forno I (where pig iron is made into steel) of the Usina Barreto steel mill is also scheduled.

Vallourec has 26 contracts with Petrobras today with assets totaling R$ 15.5 billion (US$ 3.8 B) and a part in dollars, of US$ 153 million.