Courtaulds Textiles, the business formed after the Courtaulds empire split its chemicals and clothing businesses in a demerger six years ago, is selling the two mills in Bolton and Oldham to Shiloh, a long-established quoted textiles and healthcare company also based in Oldham.
The deal marks the end of a dramatic decline in Courtaulds' yarn spinning businesses, which as recently as 1988 employed 5,500 people in more than 30 mills in the UK. Earlier this year it closed other mills in Atherton, Manchester, and Wolfenden in Bolton, which together employed 300 people.
Just 500 jobs are left in the two remaining mills, and last night Edmund Gartside, chairman of Shiloh, said these would be secured as a result of the sale.
"We've not bought it to cannibalise it, we've bought it to run it. We're very committed to the business and it's complementary to our existing operations," he said. It will make Shiloh the largest cotton spinner in the UK with annual sales of pounds 35m.
Stuart Banks, chief executive of Courtaulds Spinning, will also transfer to Shiloh. He said: "It's obviously sad for Courtaulds but its a very exciting day for the employees."
The Swan Lane Mill in Bolton is one of the largest in Britain, with 460,000 square feet of factory space organised on six floors. It was once part of a complex of three mills, which still dominate the surrounding skyline, though the other two were closed long ago.
Shiloh is paying just over pounds 4m for the mills which Courtaulds pointed out had an asset value of pounds 6m. They made profits last year of pounds 800,000 and are on course this year to increase this to pounds 1m. Courtaulds bought Swan Lane in 1974 and has invested heavily there in the past 10 years, spending around pounds 5m in new computerised machinery in 1989.
However under the leadership of Martin Taylor, now chief executive of Barclays Bank, the Textiles business turned its sights towards the clothing business. It is now a large supplier of underwear to Marks & Spencer.