plant, to UK-based investment firm Greybull Capital.
The move will safeguard more than 4,000 jobs, but workers are being asked to accept a pay cut and
less generous pension arrangements.
Greybull said it was arranging a £400m investment package as part of the deal.
The business will be rebranded as “British Steel” once the deal is completed in eight weeks, it said.
The new business would include the Scunthorpe works, two mills in Teesside, an engineering
workshop in Workington, a design consultancy in York, a mill in Hayange, France and sales and
Greybull partner Marc Meyohas said he was “delighted” with the agreement and that he believed
the division could become a “strong business”.
“We are now focused on taking the deal to completion in order that the business can start its next
chapter with confidence,” he added.
The Long Products Europe business is a key part of Tata Steel’s long products division, which makes
steel for the rail and construction sectors.
The division was put up for sale in 2014. Greybull, whose interest was widely known, had been in
talks with Tata for the past nine months over a possible deal.
Greybull is backing a turnaround plan, which aims to return the loss-making business to profitability
within one to two years, but will involve significant cost savings.
Staff are being asked to accept a 3% pay cut for one year and reductions to company pension
contributions. Workers are currently being balloted on the changes, which will be completed on 19
The turnaround plan was drawn up by management at Scunthorpe with input from unions and
refined by management consultancy firm McKinsey & Co.
It is understood Greybull is not envisaging further restructuring beyond the 1,200 job losses
announced last October.
That involved the closure of one of the two coke ovens at Scunthorpe and the mothballing of three
plate mills, reducing annual production capacity to 2.8m tonnes.
The move comes ahead of Tata formally putting the rest of its loss-making UK steel business up for a
The Indian steel giant said at the end of last month that it was exploring “strategic alternatives” for
its UK business.
Thousands of workers in England and Wales risk losing their jobs if a buyer cannot be found.
Tata directly employs 15,000 workers in the UK and supports thousands of others, across plants in
Port Talbot, Rotherham, Corby and Shotton.
So far, the only company to have publicly expressed an interest is Liberty House, owned by Sanjeev
Business Secretary Sajid Javid is due to address MPs on progress later on Monday.