Steel pipe manufacturer Benteler Group announced Monday it will halt the sale of its plant in Shreveport, Louisiana, to fellow steel pipe producer Tenaris.
The $460 million deal would have combined two suppliers of seamless tubing and production casing in the U.S. The products are key types of steel pipe used in the extraction of oil and gas.
Benteler, whose steel and tubing business is based in Germany, claimed the decision to retain the plant was based on improved market conditions and the potential for future growth.
The U.S. oil and gas sector has seen demand increase since the sale was announced in July, according to the press release. Under these improved conditions, the value of the Louisiana plant is now “significantly higher” than the purchase price agreed to with Luxembourg-based Tenaris last summer.
However, the Department of Justice claims the decision was made after its Antitrust Division raised competition concerns about the deal.
Had the deal gone through, the department said it would have cemented Tenaris as the undisputed dominant player in an already concentrated industry.
Tenaris operates manufacturing facilities across 16 countries, with 13 located in the U.S. The company pulled in $6.5 billion in net sales in 2021.
“A competitive oil and gas industry is vital to the U.S. economy,” said Assistant Attorney General Jonathan Kanter with the DOJ’s Antitrust Division. “The proposed acquisition would have eliminated Benteler as an independent competitor and threatened higher prices, lower quality, and less innovation in this market.”
