Tata Steel in talks to sell UK division to Swiss MNC Klesch
16 Oct 2014 11:09 PM GMT
The company, which employs 6,500 people across Europe, said it had signed an agreement with Geneva-headquartered Klesch Group, which it hoped would lead to a sale.
The Long Products division includes operations in Scunthorpe and Teesside in England and Dalzell and Clydebridge in Scotland. It also includes sites in Workington and York, as well as other operations in France and Germany.
‘We will now move into detailed due diligence and negotiations, though no assurance can be given about the outcome,’ Karl Koehler, chief executive of Tata Steel's European operations, said in a statement.
‘We have therefore decided to concentrate our resources mainly on our strip products activities, where we have greater cross-European production and technological synergies. ‘We want to build a sustainable business in the UK and further develop our mainland Europe business and we are committed to providing the necessary leadership and financial resources to achieve that,’ he added.
Tata has signed a memorandum of understanding with the industrial and commodities group, formalising its intention to agree to a sale.
The Klesch group, run by US billionaire investor Gary Klesch, is also investing in an oil refinery in Milford Haven in Wales.
Tata Steel employs 30,500 people across Europe, including 17,500 in the UK. The Long Products division provides steel rail, rod, plate and other steel products to the construction and excavation industries.
UK business secretary Vince Cable said he will look to meet Klesch to discuss the firm's plan's for Tata Steel's Long Products division. ‘The proposed sale shows the harsh reality of trading conditions in parts of the steel industry. I met the global head of Tata in India this week and he has personally re-affirmed to me his company's commitment to the British steel industry and to investing substantially in Port Talbot and strip steel,’ Cable said.Â
‘My officials and I will continue to work closely with Tata Steel and seek to meet the potential buyer, Klesch, to understand more about their plans. We welcome Klesch's stated intention to support the continuity of the business,’ Cable said. Tata Steel had assured the trade unions that it would consult them at every stage of the deal.
However, some trade union leaders claimed that the company had failed to take them in confidence and they were extremely disappointed.
Community, Unite and GMB trade unions claimed in a joint statement: ‘Tata Steel has failed to consult at all with the trade unions before making this move, which could have serious consequences for employees and contractors right across Tata Steel, not just within the Long Products business that it wants to sell.’
Tata Steel began its operations in Europe in 2007 with its $13 billion acquisition of Britain's Corus.
The Long Products division includes operations in Scunthorpe and Teesside in England and Dalzell and Clydebridge in Scotland. It also includes sites in Workington and York, as well as other operations in France and Germany.
‘We will now move into detailed due diligence and negotiations, though no assurance can be given about the outcome,’ Karl Koehler, chief executive of Tata Steel's European operations, said in a statement.
‘We have therefore decided to concentrate our resources mainly on our strip products activities, where we have greater cross-European production and technological synergies. ‘We want to build a sustainable business in the UK and further develop our mainland Europe business and we are committed to providing the necessary leadership and financial resources to achieve that,’ he added.
Tata has signed a memorandum of understanding with the industrial and commodities group, formalising its intention to agree to a sale.
The Klesch group, run by US billionaire investor Gary Klesch, is also investing in an oil refinery in Milford Haven in Wales.
Tata Steel employs 30,500 people across Europe, including 17,500 in the UK. The Long Products division provides steel rail, rod, plate and other steel products to the construction and excavation industries.
UK business secretary Vince Cable said he will look to meet Klesch to discuss the firm's plan's for Tata Steel's Long Products division. ‘The proposed sale shows the harsh reality of trading conditions in parts of the steel industry. I met the global head of Tata in India this week and he has personally re-affirmed to me his company's commitment to the British steel industry and to investing substantially in Port Talbot and strip steel,’ Cable said.Â
‘My officials and I will continue to work closely with Tata Steel and seek to meet the potential buyer, Klesch, to understand more about their plans. We welcome Klesch's stated intention to support the continuity of the business,’ Cable said. Tata Steel had assured the trade unions that it would consult them at every stage of the deal.
However, some trade union leaders claimed that the company had failed to take them in confidence and they were extremely disappointed.
Community, Unite and GMB trade unions claimed in a joint statement: ‘Tata Steel has failed to consult at all with the trade unions before making this move, which could have serious consequences for employees and contractors right across Tata Steel, not just within the Long Products business that it wants to sell.’
Tata Steel began its operations in Europe in 2007 with its $13 billion acquisition of Britain's Corus.
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