Shagang Group 11.04.2020

We are pleased to announce that we successfully exchanged contracts and reached an agreement to purchase British Steel on the 4th of April, with the sale officially being processed and completed tonight.

The agreement sees the two of our businesses combine to create a world-class steelmaking group with global scale and ambition. The combination brings together expertise from both businesses to help us secure a long-term future for British Steel’s operations through the continued production of high-quality steel products. The sale also preserves thousands of jobs in a key foundation industry for the UK.

Shagang Group Chairman Shen Wenrong, said: “We are delighted to have reached this agreement. As a growing company with large ambitions, we have long admired the bulwark that is British Steel and appreciate its illustrious heritage. We share with the thousands of British Steel workers a passion for this industry and we are determined that together we can transform this business.”

We are currently planning to invest £1.2 billion in the business over the next decade in upgrading the plants and machinery, improving the new company’s environmental performance and boosting energy efficiency to place the operations on a more competitive and sustainable footing. We will also further help to ensure a long-term sustainable future for British Steel and its employees by investing in identifying new markets and products. We anticipate making offers to as many employees across the business as possible.

Under the terms of the agreement, we acquire certain assets of British Steel from the Official Receiver, subject to regulatory approvals and certain employee consultation procedures. This included the steelworks at Scunthorpe and UK mills at Teesside Beam Mill and Skinningrove, and the subsidiary businesses FN Steel, British Steel France and TSP Engineering.

We had already begun talks with the union representatives and employees ahead of the completion of the sale, at which point the Official Receiver, EY, handed over the running of British Steel to the Shagang Group. We are committed to preserving UK jobs and investing in a workforce that can help to strengthen British Steel’s UK operations and we have already started the process of engaging positively with the unions and employees.

Mr. Wenrong added: “This is the beginning of a long journey. We know that this is only the start of the hard work of revitalizing British Steel. But we believe that this combination will create a powerful, profitable and sustainable business that will ensure the long-term future of thousands of jobs while producing the innovative high-quality steel products that the world needs.”