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Liberty Steel set to snap up Tata's Port Talbot steelworks

LaToya Harding
·Business Reporter, Yahoo Finance UK
·2-min read
A bus is reflected in a Tata sign outside their offices in London
Over the weekend Sanjeev Gupta’s company announced that Swedish firm SSAB was negotiating with Tata over buying its assets in the Netherlands. Photo: Reuters/Toby Melville TPX

Indian conglomerate Liberty Steel is poised to snap up Tata’s (TATASTEEL.NS) UK steelworks at Port Talbot in Wales, it has been revealed.

Over the weekend Sanjeev Gupta’s company announced that Swedish firm SSAB (SSAB-A.ST) was negotiating with Tata over buying its assets in the Netherlands. CityAm reported.

If confirmed, the move would lead to the break-up of the group’s European steel operations.

Tata’s Port Talbot steelworks, which currently employs around 8,000 people, has been looking for emergency government funding over the last few months. Last week it revealed it was reviewing all options to ensure the UK business was “self-sustaining” in the future.

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Tata Steel UK made a pre-tax loss of £654m ($869m) for the previous financial year. Back in 2016 Liberty Steel submitted a previous bid for the Port Talbot site after Tata put it up for sale. However, it later backtracked and decided to hold onto the plant.

Sources close to Liberty Steel told CityAm that in the event that no funding was forthcoming, Gupta’s firm, which has an appetite for struggling metals businesses, would be a willing buyer.

READ MORE: SSAB eyes Tata Steel's Dutch assets as European consolidation picks up

It comes as Liberty, which is part of Gupta’s GFG Alliance, has submitted a bid for German conglomerate Thyssenkrupp’s (TKA.DE) struggling steel division, potentially creating a disruption behemoth in a crowded European market.

Earlier this month it was in talks with the German government over an aid package worth at least €5bn ($5.9bn, £4.5bn).

At the time, sources familiar with the matter told Bloomberg that Chancellor Angela Merkel’s government signaled a willingness to provide financial support to shore up the unit and ensure future domestic production of an environmentally friendly form of steel.

Troubled Thyssenkrupp will likely lose €1bn this year, according to the Financial Times.

Liberty Steel declined to comment.

Watch: Thyssenkrupp to cut cut another 5,000 jobs