Acquisition Talks For Tata Steel Long Products Business Unsuccessful, Company Confirms
08/06/2015 - Confirming earlier reports, Tata Steel executives said that negotiations on the sale of its European long products business have broken off.
The steelmaker had been negotiating a sale with the Klesch Group, a global metals, chemical and oil company, since the two signed a memorandum of understanding in October 2014. Klesch Group chairman Gary Klesch had told The Financial Times that the company ended talks over frustrations on what he said was the U.K.'s lack of action on energy prices and Chinese imports.
Earlier this year, the company announced plans to restructure the business, spinning it off into a standalone subsidiary to help advance its strategic options. As of 2 August, the business began operating as a 100 percent subsidiary of Tata Steel UK Ltd. Tata executives said in a statement that the stand-alone business would combine the strength of Tata Steel with a flexible and more focused operational approach.
“The long products business has been facing severe challenges. The establishment of long products as a wholly-owned subsidiary of Tata Steel UK has created a new structure that will enable it to determine the strategic options to be assessed and the appropriate actions to be taken," said Karl Koehler, chief executive of Tata Steel’s European operations, in a statement.
“The U.K. steel industry is faced with stiff headwinds in the shape of rising imports, uncompetitive energy prices, a strong pound and the lack of an industrial strategy for the steel sector. Now more than ever the U.K. government needs to demonstrate commitment to steel as a foundation industry for the U.K. economy and to take immediate action to mitigate the effects of those issues which it has the power to influence,” he said.
The company said the business will continue to produce rail, wire rod, plate, sections and special profiles as "progress is made towards a more sustainable future for the business."
Earlier this year, the company announced plans to restructure the business, spinning it off into a standalone subsidiary to help advance its strategic options. As of 2 August, the business began operating as a 100 percent subsidiary of Tata Steel UK Ltd. Tata executives said in a statement that the stand-alone business would combine the strength of Tata Steel with a flexible and more focused operational approach.
“The long products business has been facing severe challenges. The establishment of long products as a wholly-owned subsidiary of Tata Steel UK has created a new structure that will enable it to determine the strategic options to be assessed and the appropriate actions to be taken," said Karl Koehler, chief executive of Tata Steel’s European operations, in a statement.
“The U.K. steel industry is faced with stiff headwinds in the shape of rising imports, uncompetitive energy prices, a strong pound and the lack of an industrial strategy for the steel sector. Now more than ever the U.K. government needs to demonstrate commitment to steel as a foundation industry for the U.K. economy and to take immediate action to mitigate the effects of those issues which it has the power to influence,” he said.
The company said the business will continue to produce rail, wire rod, plate, sections and special profiles as "progress is made towards a more sustainable future for the business."
