MRC Global Inc. (NYSE: MRC), a global distributor of pipe, valves, fittings, and related products and services to the energy industry, has entered into a definitive agreement to sell its US oil country tubular goods (OCTG) business to Sooner Pipe LLC, a subsidiary of Marubeni-Itochu Tubulars America Inc. for $48 million, subject to certain adjustments.
MRC Global's US OCTG sales were approximately $305 million in 2015. As a result of the expected sale, a pre-tax charge of approximately $5 million is expected to be recorded in the fourth quarter of 2015. The transaction is expected to close in the first quarter of 2016.
Andrew R. Lane, MRC Global's chairman, president, and CEO, stated, "The divestiture of our OCTG product line is the culmination of our strategy to reduce our exposure to upstream drilling volatility and to focus on growing our higher margin product lines, particularly our valve, valve automation, and instrumentation business. We remain committed to our line pipe business as it has applications across each of the upstream, midstream, and downstream end markets. This transaction benefits our US OCTG customers, suppliers, and employees by placing the business with the leading OCTG distributor and service provider. We will work with Sooner to ensure a smooth transition of the business."