Tata Steel says it has “discontinued” talks with Klesch over the sale of its long products business, which includes rail mills in Scunthorpe and Hayange.
In October 2014, Tata Steel announced it had signed a Memorandum of Understanding with the global commodities business. As well as rail mills in Scunthorpe and Hayange, the sale was to include the company’s rail consultancy in York.
Following the breakdown in negotiations, Tata Steel has decided to make the long products business a 100 per cent subsidiary of Tata Steel UK Ltd.
Karl Koehler, chief executive of Tata Steel’s European operations, said: ‘The long products business has been facing severe challenges.
“The establishment of long products as a wholly-owned subsidiary of Tata Steel UK has created a new structure that will enable it to determine the strategic options to be assessed and the appropriate actions to be taken.
‘The UK steel industry is faced with stiff headwinds in the shape of rising imports, uncompetitive energy prices, a strong pound and the lack of an industrial strategy for the steel sector.
“Now more than ever the UK government needs to demonstrate commitment to steel as a foundation industry for the UK economy and to take immediate action to mitigate the effects of those issues which it has the power to influence.”
