Liberty House, an international industrials and metals group, has entered into exclusive negotiations with Tata Steel UK to acquire the troubled steelmaker's Speciality Steels business for £100 million.

The largely South Yorkshire-based business, which has service centres in the West Midlands and Lancashire, manufactures a range of high-value speciality steel products for the automotive and aerospace industries.

If the acquisition goes ahead, it will secure around 1,700 jobs for steel-workers at major production facilities in Rotherham and Stocksbridge, a mill in Brinsworth and service centres in Wednesbury and Bolton, plus thousands more in the UK supply chain. The planned deal, in combination with Liberty's existing industrial footprint in the UK, would establish the group as one of Britain’s most significant steel and engineering employers.

The Speciality Steels plants specialise in manufacturing carbon, alloy and stainless steels for highly-demanding applications, with all of the output derived from recycled steel, melted in electric arc furnaces.

According to Liberty, the acquisition would be a significant step in realising the company's 'green steel' vision, which promotes widespread melting and upcycling of UK domestic scrap metal, using arc furnaces powered from renewable energy sources.

Sanjeev Gupta, Liberty House Group's executive chairman said he looks forward to working with Tata Steel to complete what he called a hugely important milestone transaction. "We recognise the world-class skills of the Speciality Steels workforce and are eager to join with them to develop the business and increase market share, both domestically and internationally using our global presence. As part of that process we will now engage fully with the trade unions and the local community. We are counting on their full support.”

Completion of the acquisition is subject to confirmatory due diligence, and obtaining any merger clearances and definitive acquisition documentation. Liberty House and Tata Steel expect the acquisition to complete early in the first quarter of 2017.

Macquarie Capital (Europe) Limited is acting as financial advisor to Liberty House.

The planned purchase of Tata Steel’s Speciality Steels business is the latest in a succession of key acquisitions and business turnarounds undertaken by Liberty House over the past year. These have included major assets in South Wales, the West Midlands, Scotland and Kent.