(Updates throughout, adds specifics about the deal).
By Alex MacDonald
LONDON--Tata Steel Ltd. (500470.BY) confirmed Wednesday that
talks to sell its European long products business and associated
distribution facilities to the Klesch Group have ended.
Tata Steel, Europe's second-largest steelmaker by production
capacity after ArcelorMittal (MT), had signed a preliminary
agreement with the Switzerland-based industrial commodities company
in October, with a view to selling the business.
The long products division produces rail, rod, plate and other
steel products for construction and excavation companies. It can
produce up to 5 million metric tons of steel and employs more than
6,000 people.
Tata was seeking to sell the business, which has been battered
by weak demand in recent years, to focus on a smaller range of
high-value steel products such as flat steel for the auto industry.
At the time the preliminary talks were announced, analysts had
estimated the business could be worth around $1.4 billion.
The news that talks had ended was first reported by the
Financial Times on Monday. The newspaper said the Klesch Group's
founder, U.S. billionaire Gary Klesch, had called off the talks
following growing fustration with the U.K. government for its
apparent lack of interest in providing support to ailing
traditional industries.
India-based Tata Steel has now incorporated the long products
business into Tata Steel U.K. with a view to determining the
strategy options for the unit, said Karl Koehler, chief executive
of Tata Steel's European operations, in a statement.
Write to Alex MacDonald at alex.macdonald@wsj.com
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