By Alex MacDonald
LONDON--Tata Steel Ltd. (500470.BY), Europe's second largest
steelmaker, said Wednesday it has started talks to sell its
European long-steel products business and affiliated distribution
centers to Switzerland-based industrial commodities company Klesch
Group.
Tata Steel has signed a memorandum of understanding with Klesch
which will allow the latter to carry out due diligence on several
of Tata's U.K.-based assets, including the Scunthorpe steelworks
and steel plants in Teesside, Dalzell and Clydebridge, as well as
other operations in France and Germany, the company said.
"We have...decided to concentrate our resources mainly on our
strip products activities, where we have greater cross-European
production and technological synergies," said Karl Koehler, chief
executive of Tata Steel's European operations.
India's Tata Steel, which entered the European steel market in
2007 with the multi-billion dollar purchase of Corus, has been
seeking to turn around its long products business after the
financial crisis of 2008-09 took its toll on the region's steel
demand, particularly in terms of construction activity. Tata Steel
has invested GBP1.2 billion to upgrade its U.K. operations, several
of which are focused on the production of long-steel products.
The Klesch Group is a global industrial commodities business,
with three divisions specializing in the production and trading of
chemicals, metals and oil. It was founded in 1990 and has revenue
in excess of EUR5 billion with 2,000 people located in over 17
countries worldwide.
-Write to Alex MacDonald at alex.macdonald@wsj.com
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