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Tata Steel will sell its speciality steel business in the UK, which employs around 1,700 people, to Sanjeev Gupta’s Liberty House Group for £100 million, the companies confirmed on Thursday.
The companies had signed a letter of intent over the deal in November 2016, but have now reached a definitive sales agreement.
Tata Steel’s speciality division covers assets in Yorkshire and services centres in Britain and China. It focuses on steel for the aerospace, automotive and oil and gas industries.
The sale will leave Tata Steel with its strip products business, after selling its long products business to Greybull Capital last year, as it seeks to transform and restructure its European operations in the face of tough conditions for the industry.
“We will be handing over a business which has been transformed following difficult decisions to restructure and re-focus on higher-value markets,” said Bimlendra Jha, CEO of Tata Steel UK.
Major stepGupta, the Executive Chairman of Liberty House, said the asset was one of a handful of operations in this sector and would enable the company to “melt scrap steel to create high value added products”. The company, he said, was focusing on a strategy to recycle UK scrap using renewable energy, and that the acquisition represented a major step.
Liberty House has made a string of purchases in the UK steel sector over the past two years, acquiring Tata Steel’s Scottish assets last year.
Unions welcomed the development. “Community has been campaigning for months for longer term certainty for these highly skilled jobs, and we will now engage more directly with Liberty to understand their plan for the business,” said Roy Rickhuss, General Secretary of the Community union.
Unions are currently balloting members on proposals to change the British Steel Pension Scheme, which Tata Steel says is essential to the sustainable future of its British business. The company said it was in discussions with the scheme’s trustee and the pension regulator to develop a structural solution to the scheme in coming months.
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