Merger threat to steel jobs
Sources said that there could be up to 250 layoffs among the 3,200-strong combined workforce as ASW, in Cardiff, and Co-Steel, in Kent, strive to slash costs and reduce capacity. The enlarged group may close one of four furnaces and one of five steel mills.
The companies said the Christmas Eve deal would "inevitably lead to job losses" but gave no numbers. Michael Leahy, general secretary-elect of the Iron and Steel Trades Confederation, demanded an "urgent meeting to see how we can best protect our members interests while ensuring plants remain viable".
ASW said buying Co-Steel from Canadian parent Co-Steel Inc would "address the fundamental industry problem of overcapacity" and yield substantial cost savings. The group will be the leading steel supplier to UK construction, with over half the market, and a medium-sized player in Europe.
Insiders said the combined company, which will have annual turnover of about pounds 500m, could save pounds 20m a year by integrating production plants and administrative functions.
George Duncan, the ASW chairman who is to keep the post in the new group, said: "The intention is that in a very tough market we will be in a stronger position to compete."
The deal was part-financed by venture capitalist Candover, which is set to inject up pounds 43m in the new company, and will become one of the largest shareholders with up to 54 per cent of the group. The bulk of the holding will be in convertible loan notes - that can be exchanged for shares at a later date. Candover said it would not keep its stake in ASW and was planning to distribute it to several institutions on conversion of the notes.
Candover was understood to have picked the group's new chief executive, Graham Mackenzie, the director-general of the Engineering Employers' Federation. Mr Mackenzie, who will leave the trade body as soon as a replacement is found, is a former chief executive of United Engineering Steels. He will replace Alain Soulas, ASW's current chief executive.
Co-Steel Inc will also be a major shareholder in the new group with up to 38 per cent.
Charles Saatchi accepts caution for assault over incident in Scott’s restaurant when he put his hands on throat of wife Nigella Lawson
Special Report: US troops are stationed in Japan to protect the nation. But to sex workers in Okinawa, they bring fear, not security
Police examine photographs of Charles Saatchi with hand on Nigella Lawson's throat
Russian President Vladimir Putin denies stealing £16,000 diamond-encrusted Super Bowl ring
Iran to send 4,000 troops to aid President Assad forces in Syria
- 1 Alan Pardew's warning to Joe Kinnear: I am still the Newcastle manager
- 2 Breaking the Silence: In the reality of occupation, there are no Palestinian civilians – only potential terrorists
- 3 Charles Saatchi accepts caution for assault over incident in Scott’s restaurant when he put his hands on throat of wife Nigella Lawson
- 4 Exclusive: Cristiano Ronaldo advised to stay at Real Madrid for another 18 months before making possible switch to Manchester United
- 5 Iran to send 4,000 troops to aid President Assad forces in Syria
iJobs Money & Business
£20,000 - £45,000 OTE: Co-Venture: Working for this company will give you a ch...
Up to £80,000 PA Plus Benefits: Legal & General: An exciting opportunity for a...
£20 - £22 per hour: Orgtel: Documentation Assistant - London - Banking - £20 -...
£550 - £650 per day: Orgtel: Test Manager, London, Investment Banking, £550-65...