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Note 27 - Business Combinations | 12 Months Ended
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Dec. 31, 2019
Statement Line Items [Line Items] |
Disclosure of business combinations [text block] |
| 27 | Business combinations
Acquisition of Saudi Steel Pipe Company § Acquisition On January 21, 2019, Tenaris acquired 47.79% of the shares of SSP, a welded steel pipes producer listed on the Saudi stock market, for a total amount of SAR530 million (approximately $141 million). The amount was paid with Tenaris cash in hand. SSP’s facilities are located in the Eastern Province of the Kingdom of Saudi Arabia and have a manufacturing capacity of 360,000 tons per year. SSP started its operations in 1980 and serves energy industrial and commercial segments, is qualified to supply products with major national oil companies in the region. Upon closing of the acquisition, four Tenaris’s nominees were appointed as new members of the SSP’s board of directors and a Tenaris senior executive was appointed as managing director and chief executive officer of SSP. Such appointment was ratified at the shareholders meeting of SSP held on May 7, 2019, where the shareholders also approved the reappointment of the Tenaris’s nominees until June 6, 2022. The Company has begun consolidating SSP’s balances and results of operations as from January 21, 2019.
| § | Fair value of net assets acquired
The application of the purchase method requires certain estimates and assumptions specially concerning the determination of the fair values of the acquired intangible assets and property, plant and equipment as well as the liabilities assumed at the date of the acquisition. The fair values determined at the acquisition date are based mainly on discounted cash flows and other valuation techniques. The allocation of the fair values determined for the assets and liabilities arising from the acquisition is as follows:
Fair value of acquired assets and liabilities: |  | SAR million |  | $ million
Property, Plant and Equipment |  |  | 671 |  |  |  | 179 |
Customer relationship |  |  | 305 |  |  |  | 81 |
Investment in associated |  |  | 77 |  |  |  | 21 |
Working capital |  |  | 167 |  |  |  | 45 |
Cash and Cash Equivalents |  |  | 32 |  |  |  | 9 |
Other Receivables |  |  | 11 |  |  |  | 3 |
Borrowings |  |  | (304 | ) |  |  | (81 | )
Employees end of service benefits |  |  | (59 | ) |  |  | (16 | )
Deferred Tax Liabilities |  |  | (47 | ) |  |  | (13 | )
Net assets acquired |  |  | 853 |  |  |  | 228 |
Tenaris acquired 47.79% of total assets and liabilities shown above, approximately $109 million. As of the result of the acquisition, the Company recognized a Goodwill of approximately $32.9 million. Tenaris has chosen to recognize the non-controlling interest at the proportionate share of the acquiree’s net identifiable assets. The acquired business contributed revenues for $170.6 million with a minor contribution to Tenaris’s margin for the period starting January 21, 2019 and ending December 31, 2019. If the acquisition had occurred on January 1, 2019, consolidated revenue and profit after tax would have not changed significantly. The purchase price allocation has been done with the assistance of a third party expert. Acquisition of Garrett In September 2017, Tenaris acquired 100% of Garrett (a pipe services and trucking business) through the payment of a price of $10.4 million. If the acquisition had occurred on January 1, 2017, Tenaris’s unaudited pro forma net sales and net income from continuing operations would not have changed materially.

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