Indian steel giant Tata have announced that they have agreed to sell the UK speciality steels business to Liberty house. It’s thought that this will save under threat jobs in the north of England. It’s a large boost to a sector which has taken heavy hits due to lower cost supply from the far east.
The deal, worth £100m will see the transfer of 1,700 jobs to the firm owned by Indian business tycoon Sanjeev Gupta. It will see them take major production facilities in Rotherham and Stocksbridge, a mill in Brinsworth and service centres in Wednesbury and Bolton
It means that after a strategic review of their UK operations that Tata will keep hold of the much publicised plant at Port Talbot in Wales. The plant had been under threat of closure, and there had been talk of a management buy out at the plant. But Tata have had a change of heart on the plant and are in discussions with German giant ThyssenKrupp about merging their European operations with the Indian giants own at the Port Talbot works. though there is much red tape to get through before any deal can be done.
It was good news for the steel union Community, the union has worked with Liberty house at some of their other sites, and there seems to be an open dialogue between the company and the union as to the future of its steel operations in the UK. The general secretary for the union Roy Rickhuss has emphasised that his unions number one priority was to ensure that the company implement plans for the future security of the 1,700 jobs involved in the deal, and to deal with the issue of pensions in the sector. The pensions of the British Steel pension scheme currently have liabilities of around £15 billion.
In a press release on their website Liberty house the company stated that the deal would secure 1,700 jobs and stated that the UK has high value skills in the profitable sector. You can read the release here. They also stated that “The acquisition would be a significant step in realising Liberty’s GREENSTEEL vision which promotes widespread melting and upcycling of UK domestic scrap metal, using arc furnaces powered from renewable energy sources.”
The deal is still subject to scrutiny from the competition authorities, and of course due diligence. But the deal is expected to pass without issue. The agreement will be expected to come in to force in the first quarter of 2017 at the earliest.
Joseph is a 34 year old freelance writer from London. He has a wide interest in politics and specialises in the subject. He's also a blog writer in his spare time.