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Liberty House seals deal to buy Tata Steel?s Speciality Steels

Speciality Steels makes high-value steels for the aerospace, automotive and oil and gas industries. (Image source: Tata Steel UK)

Industrials and metals group, Liberty House, has signed an agreement with Tata Steel UK to acquire its Speciality Steels business for a total consideration of US$124.7mn

The sale follows an extensive due diligence period, after the parties entered exclusive discussions in November 2016. The deal secures the future of around 1,700 jobs directly, and thousands more in the supply chain and regional economy, according to the company.

Speciality Steels, which makes high-value steels for the aerospace, automotive and oil and gas industries, has manufacturing facilities in Rotherham, Stocksbridge and Brinsworth in South Yorkshire and Wednesbury in the West Midlands, as well as service centres located in Bolton, and in China.

The business has the capability to make around 1.1mn tonnes of liquid steel per year from recycled scrap, melted in two electric arc furnaces at Rotherham. This steel feeds downstream casting, re-melting and rolling processes, producing a range of high-value steels.

Liberty House has a vertically-integrated business model ranging from the production of raw steel and aluminium through to advanced engineered products. The Group is a Tier 1 supplier of steel components to the automotive and aerospace sectors and the Speciality business will allow it to expand its product range significantly.

Liberty works with energy company SIMEC ? a fellow member of the GFG Alliance ? to deliver a GREENSTEEL strategy, which involves the recycling of UK scrap using renewable energy. The Speciality Steels acquisition is a major step forward for this strategy as it gives the group melting capacity in Britain for the first time. In late 2016 Liberty also created Liberty Metal Recycling Ltd, to secure supplies of scrap steel generated in the UK economy.

As part of the GREENSTEEL strategy, SIMEC now is actively considering investment in renewable power generation units at the Speciality Steels sites, adding to its existing portfolio of approximately one hundred megawatts of renewable power capacity across the UK.

Sanjeev Gupta, executive chairman of the 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. Fulfilling the next key stage of our GREENSTEEL vision is incredibly exciting. 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.?

The Speciality Steels transaction is the latest in a succession of key acquisitions and business turnarounds undertaken by Liberty House, SIMEC and the broader GFG Alliance over the past year.

Liberty House and its advisers will work towards the completion of the transaction as soon as possible. Macquarie Capital (Europe) Limited acted as financial adviser to Liberty House in the acquisition.