Liberty House seeks to grow its steel business

Liberty House Group (LHG), a U.K.-based business specialising in metals trading, steel manufacturing and distribution of steel and advanced engineering products, has entered into exclusive negotiations with Tata Steel UK  to acquire Tata’s Speciality Steels business for £100 million ($124 million).

The business, based primarily in the United Kingdom, includes service centers in the West Midlands and Lancashire parts of the U.K. The Speciality division manufactures a range of high-value specialty steel products for the automotive and aerospace sectors. The locations in the U.K. that LHG may acquire include Tata’s electric arc steel works in Rotherham, a steel purifying facility in Stocksbridge, a mill in Brinsworth and service centers in Wednesbury and Bolton. The deal includes Tata Steel’s service centers in Suzhou and Xi'an, China.

The Speciality Steels plants focus on manufacturing carbon, alloy and stainless steels for demanding applications. According to LHG, all of the output is derived from recycled steel, which is melted in electric arc furnaces.

In a news release announcing the possible deal, LHG says the acquisition would be a significant step in realising its Greensteel vision, which promotes widespread melting and upcycling of scrap metal generated in the U.K through the use of electric arc furnaces powered from renewable energy sources.

Sanjeev Gupta, executive chairman of the LHG, says, “We look forward to working with Tata Steel over the coming weeks to complete this hugely important milestone transaction. We recognize 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. As part of that process we will now engage fully with the trade unions and the local community. We are counting on their full support.”

Bimlendra Jha, CEO of Tata Steel UK, says, “The Speciality Steels business is independent of the Pan-European strip products supply chain, and today’s announcement is in line with the overall restructuring strategy of the U.K. portfolio. This is an important step forward in seeking a future for Speciality Steels, and we have reached this stage thanks to the efforts of employees, trade unions and management. We now look forward to working with Liberty on the due diligence and other work streams so that the sale can be successfully concluded. We will continue to work closely with trade unions and will communicate any material news on this issue to the employees on an ongoing basis."

Bimlendra adds, “We continue to actively seek solutions to the company’s structural challenges and work with all stakeholders. Among those challenges, there is the need to develop a more sustainable business in the U.K. as well as a self-sustaining future for the British Steel Pension Scheme.”

Liberty House and Tata Steel say they expect the acquisition to complete early in the first quarter of 2017.