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Marubeni-Itochu Buys Biggest U.S. Pipes Trader for $600 Million

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Sept. 9 (Bloomberg) -- Marubeni-Itochu Steel Inc. agreed to buy Sooner Inc., the largest U.S. distributor of pipes for the oil and gas industry, for $600 million to tap the benefits of increased energy output in the U.S.

The Tokyo-based venture between Japan’s third-largest trading house Itochu Corp. and its fifth-largest Marubeni Corp. will gain access to Sooner’s five main U.S. supply bases and its clients, from multinational oil majors to independent producers, Marubeni-Itochu said in a statement today.

The U.S. accounts for 40 percent, or 5.5 million metric tons, of the global market for Oil Country Tubular Goods, or pipes used in the energy industry, and Sooner has the biggest client base in the country, Marubeni-Itochu said.

The pipe trader, owned by Oil States International Inc., had sales of $1.8 billion last year. Aided by techniques including hydraulic fracturing, U.S. oil output in the seven days to July 5 jumped to 7.4 million barrels a day, its highest since January 1992, the Energy Information Administration, a unit of the U.S. Energy Department, said July 11.

A slowdown in Chinese demand and sluggish economic growth in emerging markets this year has refocused Japanese trade houses’ investments from the extraction of resources to their processing and transportation.

Just three of the top 20 investments announced by Japan’s traders this year were in commodity producing assets, compared to 10 in the same period last year, data compiled by Bloomberg show. The purchase of Sooner would be the fifth-largest outlay by a Japanese trading company this year, the data show.

To contact the reporter on this story: Yuriy Humber in Tokyo at yhumber@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net