Liberty Group has bought Tata’s Speciality Steels division in a £100m deal set to safeguard 1,700 jobs - and create 300 new ones.
Liberty boss Sanjeev Gupta announced the successful handover after months of negotiations - and then unveiled plans to invest £20m this year and start hiring immediately.
The privately-owned company plans to take on 300 production and shopfloor workers to fire the business back up to capacity.
The news is a huge boost to the steel towns of Rotherham and Stocksbridge which have suffered hundreds of job cuts as part of a wider crisis in the steel industry.
Mr Gupta, executive chairman of Liberty House, was set to meet Bilmendra Jha, chief executive of Tata Steels UK, at the Rotherham plant for a handover ceremony this morning.
A Liberty spokesman said the deal secured the future of operations in South Yorkshire.
He added: “We regard it as a potentially really good business. We’ll invest £20m in the first year to improve competitiveness, with more to come over five years. There’s also been investment in recent years by Tata, at Stocksbridge in particular.
“It’s great news and you don’t often get good news in the steel industry.”
Sanjeev Gupta said: “The Speciality Steels business is a global leader in its field, with a highly-skilled and well-motivated workforce and we are eager to invest so it can grow and achieve its full potential.
“Today marks a step change for the Liberty House Group because we are taking on strategically important capacity that will drive expansion in the years ahead.
“It will help us achieve our GREENSTEEL vision and facilitate investment in engineering products, thereby reducing the supply-chain gaps in the UK, especially in automotive and aerospace sectors.
“By investing to acquire Speciality Steels we are casting a big vote of confidence in the future of British industry. With the right business model and an innovative approach, the UK steel and engineering sectors can recover and thrive. The Government is now pursuing a new post-Brexit industrial strategy and steel must be at the heart of that strategy.”
The Rotherham operations include two arc furnaces for melting scrap steel, only one of which is operating. Liberty plans to bring it up to capacity and the mothballed one back on stream.
Meanwhile, the capacity of a bar mill will be increased “several times over.”
Speciality Steels employs 1,700 at five steelworks, some 860 at a purifying facility in Stocksbridge, 750 at Aldwarke and Thrybergh in Rotherham and 110 at a bar mill in Brinsworth. It also has units in Hartlepool, Lancashire and two in China.
Some 70 per cent of business is export, half into Europe, on turnover of £300m. It makes aerospace, automotive and oil and gas products. Customers include Rolls-Royce and Jaguar Land Rover.
Rotherham MP John Healey, who was an organiser of a steel crisis summit in Rotherham 18 months ago, said the deal was a big vote of confidence in South Yorkshire steel-making.
He added: “It’s great to see the sale go through. For the first time in years, Rotherham steelworkers and their families have some hope for the future.
“Liberty House has pledged the investment, jobs and marketing that can continue specialty steel’s success. They’re aiming for more jobs, fresh overseas markets, expansion of the Thrybergh bar mill and to boost steel-making in the main Rotherham plant.
“I will carry on working to back the new owners and the workforce, and keep on the Government’s case about support for our UK steel industry. Liberty is backing British steel-making, and Government must now play its part on energy costs, business rates, skills funding and a strong buy-British bias in big Government projects.”
Last month, Liberty announced its management for Speciality Steels with Jon Bolton as chief executive, Peter Hogg as chief operations officer and Chris Kirby as chief financial officer.
Jon Bolton is currently chief executive of Liberty’s plates and UK steel development, and chair of the employers’ body UK Steel, Peter Hogg is moving from director of long products maker, British Steel, while Chris Kirby is a senior consultant to metals, mining and energy firms.