Written by: Keith Tully
Reviewed: Monday 11th April, 2016
A deal has been agreed to see Tata Steel sell several of its business assets in the UK in a transaction that looks set to save in excess of 4,000 jobs within the beleaguered British steel industry.
Tata Steel has been considering its options in relation to a complete withdrawal from the British steel industry in recent weeks, with thousands of jobs in the balance as a result.
However, the India-based international steel giant has agreed to sell its UK long products business to the investment group Greybull Capital for a nominal fee.
The acquisition deal includes a steelworks in Scunthorpe, an engineering workshop in Workington, a design consultancy in York and two mills on Teesside.
Tata’s Long Products Europe (LPE) business has been the subject of takeover talks for several months since late 2015, with 4,400 jobs in the UK and a further 400 in France on the line.
Employees of the business are being asked to accept pay cuts and changes to their pension policies as part of a deal that should see them remain employed as LPE looks to restructure and avoid liquidation.
There were 1,200 jobs lost across LPE’s operations in various parts of the UK in October 2015.
Marc Meyohas, a partner at Greybull Capital, said he is delighted at having completed the deal to buy LPE and said he believes the operation has “great potential” and can become a “strong business” in the future.
On behalf of the UK government’s Department for Business, Innovation and Skills, business secretary Sajid Javid said: “Today’s announcement is a step in the right direction for the long-term future of British steel manufacturing in Scunthorpe.
“This point wouldn’t have been reached without the efforts of all those involved especially the high skilled workforce and local management. We will now look through the detail and stand ready to provide funding on a commercial basis if required.
“The UK and Welsh Governments are working tirelessly to ensure that we can now reach a deal for Port Talbot and the other Tata sites across the UK. This agreement sends positive signals to any potential investor for the rest of Tata’s UK business.”