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Liberty House buys Tata Steel division for $125m

In a deal that looks set to secure thousands of jobs, Liberty House has signed an agreement with Tata Steel UK to acquire its speciality steels business for a total consideration of $125m

Liberty House has acquired Tata Steel UK’s speciality steels business for a total consideration of $125m (GBP100m).
Liberty House has acquired Tata Steel UK’s speciality steels business for a total consideration of $125m (GBP100m).

Liberty House has signed an agreement with Tata Steel UK to acquire its speciality steels business for a total consideration of $125m (GBP100m).

The deal, which follows a due diligence period that commenced after the parties entered into negotiations in November 2016, looks set to save 1,700 direct jobs.

Liberty stated that the agreement would also secure thousands of additional jobs across the supply chain and regional economy.

Commenting on the deal, Sanjeev Gupta, executive chairman of Liberty House Group, said: “I am proud that we are acquiring a world-class business with a very skilled workforce and broad range of high-value products.

“It is one of only a handful of such operations in the world and I am confident it will flourish within our group.”

Tata’s speciality steels business produces high-value steels for the aerospace, automotive, and oil and gas industries. The division includes several manufacturing facilities in the UK, and service centres in the UK and China.

At present, the business is able to produce approximately 1.1 million tonnes of liquid steel per year. This material feeds downstream casting, re-melting, and rolling processes, which produce a range of high-value steels.

Liberty works with energy company, SIMEC, to deliver the Greensteel strategy, which involves the recycling of UK scrap using renewable energy. The speciality steels acquisition represents a major step forward for this strategy, according to the stakeholders.

“Fulfilling the next key stage of our Greensteel vision is incredibly exciting,” said Gupta. “We will now be able to melt scrap steel to create high-value-added products, and I hope that – in due course – we will do so using renewable power.”

UK Secretary of State for Business, Energy and Industrial Strategy, Greg Clark MP, added: “Acquiring Tata’s speciality steels business in South Yorkshire and West Midlands, which manufactures high-quality steel for some of the UK’s world-leading industries, such as aerospace and automotive, is a great opportunity for Liberty House.

“I look forward to hearing more about [its] expansion plans, which [have secured] skilled jobs at the business into the future. We want to work with the steel industry on proposals to transform and upgrade [the] sector as part of the modern industrial strategy, so we can build on our strengths and extend excellence into the future.”

The speciality steels transaction is the latest in a series of acquisitions and business turnarounds undertaken by Liberty House, SIMEC, and the broader GFG Alliance over the past year. Others have included major metal, energy, engineering, property, and financial assets in South Wales, the West Midlands, and Scotland.

Liberty House said that – in conjunction with its advisors – it will work towards the completion of the transaction as soon as possible.

Macquarie Capital (Europe) Ltd acted as the financial adviser to Liberty House during the acquisition.

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