Tata Steel UK agrees to $125m sale of speciality steel unit to Liberty House (US)

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Sanjeev Gupta, the head of the Liberty Group 

Tata Steel UK has concluded the £100m sale of its Specialty Steels business to Sanjeev Gupta’s Liberty House in a deal that should guarantee some 1,700 jobs in northern England. Tata’s specialty division makes high-end alloy metals for the aerospace and energy industries. Bimlendra Jha of Tata said the sale would help secure the future of the threatened Port Talbot plant in South Wales. which makes slab steel, and employs 8,500 people. “This is good news for Speciality Steels and for Tata Steel’s core business in the UK,” he said. Global steel prices have slumped in recent years, causing financial distress for producers. Indian-conglomerate Tata announced last March that it was looking to sell all of its UK businesses after years of losses, which prompted Liberty’s bid for the speciality division. Tata later said it would look at merging some of its European operations with the German steel maker ThyssenKrupp. The firm said Thursday it is consulting with UK employees to secure a more sustainable future for its British interests. It is also in discussions with the Pension Regulator over a “structural solution” to the £15bn British Steel Pension Scheme, which has an estimated £1bn deficit. However, the financial position of Tata’s European operations, which includes Port Talbot, has picked up in recent months thanks to currency movements, lower energy costs and stronger global steel prices. In the latest quarter Tata Europe delivered a £74m operating profit, compared with a £90m loss in the same period of the previous year. Tata Steel acquired Corus, formerly British Steel, in 2007. Tata has a 23,000 workforce in Europe, of which around 10,000 are in the UK including the Specialty division.

Source :

http://www.independent.co.uk/news/business/news/tata-steel-uk-concludes-sale-of-division-to-sanjeev-guptas-liberty-house-a7571351.html

Posted in merger & acquisition.

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