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UK minister says Tata steel unit sale a commercial matter
[London] The British government, responding to concerns about possible job losses, said a possible sale by Tata Steel of a loss-making division of its European operations was a commercial decision for the two companies involved.
India's Tata said on Wednesday it was in talks to sell the loss-making Long Products division of its European operation which employs 6,500 people in Britain and Europe, to the Geneva-based Klesch Group.
The division includes operations in Scunthorpe and Teesside in northern England, and Dalzell and Clydebridge in Scotland.
On Thursday, the opposition Labour party tabled a question in parliament on the impact of the proposed sale on Britain's manufacturing capability and employment. "Decisions on company ownership are a commercial matter, but we are in contact with both companies," Business Minister Matt Hancock said in response.
The British government rarely intervenes in corporate transactions and has only a limited legal basis to do so. It can intervene in takeovers of defence companies that affect national security as well as deals that reduce the number of media owners and those that may destabilise the financial system Nevertheless, earlier this year U.S. pharmaceutical giant Pfizer attempted to buy British drugmaker AstraZeneca , prompting a political storm over a potential loss of research capability and jobs and generating calls for a wider"national interest" test on takeovers.
Prompted by the furore, Britain said it was reviewing its takeover laws to force foreign buyers of major British companies to make binding commitments on issues that are in the national interest.
Hancock said Business Secretary Vince Cable met Tata officials in India this week, who affirmed their commitment to the British steel industry. "We absolutely are going to be vigilant and careful to make sure that, should any changes be made, we can support the local communities," he added.
Tata Steel's European business, the result of its US$13 billion acquisition of Britain's Corus in 2007, accounted for about 57 percent of its total steel production in the fiscal year to March 2014. REUTERS