Venezuelan President Hugo Chávez issued this week an Executive Decree authorizing the expropriation of Matesi, an Argentine steel company. As it is the case with other government expropriations in Venezuela, Matesi’s takeover has been a long and convoluted process which started in May of 2009, when the Chávez Administration first expressed an interest in nationalizing the company. In August 2009, the Ministry of Primary Industries and Mining took over the facility, seizing its equipment.

The Matesi plant is a subsidiary of Tenaris, a leading global supplier of steel tubes and related energy services, which is part of Argentina’s Techint conglomerate. While negotiating the terms of the transfer of assets, the company did not rule out taking legal action against Venezuela to seek prompt compensation for its entire interest in Matesi.

“While we reserve all our rights under international treaties and current laws in Venezuela, Tenaris is prepared to begin negotiations with the Venezuelan authorities to achieve the fair and adequate term and conditions for the transfer of Matesi to the Venezuelan government,” said the company.

The expropriation of Matesi coincided with the release of a new study that shows that companies expropriated by Chávez are unproductive, inefficient, and a bad deal for Venezuelan workers, especially as compared to their counterparts in the private sector.