International industrials and metals group, Liberty House, has signed definitive agreements with Tata Steel UK to acquire its speciality steels business for total consideration of £100 million ($125 million).

Liberty House, based largely in South Yorkshire, UK, with service centres in the West Midlands and Lancashire, manufactures a range of high-value speciality steel products for the automotive and aerospace sectors.

The deal for Tata's high profile speciality steels business secures the future of around 1,700 jobs directly, and thousands more in the supply chain and regional economy.

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 sale follows an extensive due diligence period, after the parties entered exclusive discussions in November 2016, said a statement from Liberty House.

It will make Liberty one of the largest steel and engineering employers in the UK with more than 4,000 workers at plants located across Britain’s industrial heartlands.

The Speciality Steels business has the capability to make around 1.1m 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 said it has a vertically-integrated business model ranging from the production of raw steel and aluminium through to advanced engineered products.

The group is already 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 Siimec – 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.

Commenting on the agreement, Sanjeev Gupta, the 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," he noted.

"In the very week that Liberty is celebrating its 25th anniversary, I am delighted to welcome many hundreds more members to the Liberty family," observed Gupta.

"We are grateful for the support from all stakeholders in achieving this deal, including the employees, unions and advisers," he added.

Business Secretary Greg Clark said: "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 their expansion plans which secures skilled jobs at the business into the future," noted Clark.

“We want to work with the steel industry on proposals to transform and upgrade their sector as part of the modern Industrial Strategy so we can build on our strengths and extend excellence into the future,” he added.

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.

These have also included major metal, energy, engineering, property and financial assets in South Wales, the West Midlands and Scotland.

Macquarie Capital (Europe) Limited acted as financial adviser to Liberty House in the acquisition.-TradeArabia News Service