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Steel deal: Forsters and Slaughters lead as Tata sells first chunk of UK business

Forsters lined up against Magic Circle firm Slaughter and May on Tata Steel’s deal to sell its European long products business to UK investment house Greybull Capital.

The deal covers seven sites making steel used in construction, including Tata Steel’s steelworks in Scunthorpe, and offers a glimmer of hope to some 4,000 employees after the Indian industrial group’s decision to offload its UK business. Greybull will also pick up two mills in Teesside, an engineering workshop in Workington, a design consultancy in York, and associated distribution facilities, as well as a mill in northern France.

The UK steel crisis is the result of a number of factors, including high energy prices and an influx of cheap Chinese steel, but this deal maintains the historic Scunthorpe site home to British steelmaking for over 125 years. Greybull will rename the business British Steel.

Slaughter and May, a long-time adviser to Tata Steel, was instructed on the deal. London-based corporate partner Gary Eaborn is leading a team that includes finance partners Ian Johnson and Andrew McClean, real estate partner John Nevin, tax partner Gareth Miles and IP partner Cathy Connolly.

Forsters, which advised Greybull Capital on its last big deal in 2014 when it took a 90% stake in no-frills airline Monarch, is again advising the investment house on its deal for Tata Steel’s long products business.

Craig Thompson, a London-based M&A partner, is leading on the deal with support from the firm’s head of banking Victoria Edwards and commercial real estate partner Helen Streeton.

Thompson told Legal Business: ‘Politicians were interested in the deal but we just carried on quietly negotiating with Tata, who were very fair to negotiate with. We tried to ignore the political pressure, we’re lawyers – not politicians.’

He added: ‘Greybull are good investors. They invest in good management teams and know how to turn businesses around. They stick with them, they’re not rapacious private equity; they’re very responsible investors. There was some negotiation [over the British Steel brand] but Tata realised it was very important to the long steel business and were very gracious about it in the end.’

The UK Serious Fraud Office confirmed on Friday (8 April) that it opened a criminal investigation in December 2015 into activity at Speciality Steels, a UK business unit of Tata Steel.