Tata Steel has entered into exclusive negotiations to sell its specialty UK steel business for £100m to Liberty House, the metals group controlled by Indian-born commodities tycoon Sanjeev Gupta.
The sale is expected to close in the first quarter of next year and could protect about 1,700 jobs, Liberty said in a statement.
Tata’s mainly northern England operations will be the latest in a series of acquisitions undertaken by Liberty as it seeks to build a steel business in the UK, prompted by a wave of closures and redundancies last year that followed a collapse in global prices.
Liberty wants to create an integrated business across the country using scrap steel that can be turned into usable products. It also wants to cut down on imports of iron ore and coal by shifting its plants to using renewable energy.
The company has restarted a rolling mill in Newport, South Wales, and acquired engineering businesses from the collapse of the Caparo Group and some of Tata Steel’s other smaller British units.
Tata’s speciality steel business gives Liberty its first operations able to melt down scrap steel to be turned into finished metal for the aerospace, car and the oil and gas industries.
It comprises an electric arc steelworks in Rotherham, which makes steel from scrap metal, as well as a steel purifying facility in Stocksbridge and a mill in Brinsworth. It also includes service centres in Bolton, Wednesbury, and in Suzhou and Xi’an, China.
“We recognise the world-class skills of the Speciality Steels workforce and are eager to join with them to develop the business and increase market share, both domestically and internationally using our global presence,” said Mr Gupta.
Tata announced in March that it would look to sell all of its UK businesses, which prompted Liberty to launch a bid for its Port Talbot plant in south Wales. The Indian conglomerate then instead opted to pursue talks over a merger with German rival ThyssenKrupp.
Community, the steelworkers’ union that has spent a year campaigning to save the speciality steels business, said it welcomed the news of the deal. It said it would work to ensure Liberty protects jobs and provides pensions for workers.
“The number one priority for Community will be ensuring that Liberty have a proper plan to protect jobs and provide the long-term investment necessary to expand the business,” said Roy Rickhuss, general secretary of Community.
“Crucial to this plan will be ensuring that the business’ loyal workforce have a pension plan that provides dignity and security in retirement.”
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