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China's Jingye Group in talks to buy British Steel

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China's Jingye Group in talks to buy British Steel

By Min Zhang, Barbara Lewis

 

BEIJING/LONDON (Reuters) - China’s Jingye Group is in talks to buy British Steel, it said on Monday, in a deal estimated to be worth 70 million pounds ($90 million) that could protect thousands of British jobs.

 

Any agreement would be of major political significance in Britain as it prepares to elect a new government on Dec. 12. The lack of opportunities in northern England, where British Steel is based, is an election issue, as the social gap between north and south widens.

 

A deal is not yet finalised, Jingye told Reuters following a BBC report of an imminent 70 million pound ($90 million) agreement.

 

A spokeswoman for Hebei-based Jingye Group, a private company, said she was unclear about the value and whether further details would be announced this week.

 

Gareth Stace, director general of industry lobby group UK Steel, also told Reuters nothing had been finalised.

 

“I would be surprised if it did not get finalised,” he said. “But it’s not a done deal.”

 

No-one from British Steel was immediately available for comment.

 

The company was put into compulsory liquidation on May 22 after Greybull Capital, which bought the firm for one pound from Tata Steel (TISC.NS) three years ago, failed to secure funding to continue its operations.

 

Its closure would impact 5,000 jobs in Scunthorpe and a further 20,000 jobs in the supply chain.

 

EMBRACE CHINA

 

Turkey’s military pension fund OYAK said in August it had reached a provisional agreement to take over British Steel but that deal has not been finalised.

 

Henri Murison, director of the Northern Powerhouse Partnership, set up to boost the economy in the north of England, said a rescue deal would be “very welcome news”.

 

He said it was time to embrace cooperation with China, which is extending its international reach through its Belt and Road global development strategy. Chinese companies have also bought a steel plant in Serbia and its sole copper mine.

 

Chinese ownership is contentious, especially in the steel industry. The European Union, which does not include Serbia, has sought to protect its own steel industry from competition from cheap Chinese imports.

 

Britain has said it will leave the economic and political bloc, but has yet to agree a departure deal.

 

An advantage of Jingye, a multi-industry business specialized in iron and steel, is that it knows the industry and has the ability to invest, industry sources say.

 

With 23,500 employees and registered capital of 39 billion yuan ($5.58 billion), Jingye Group ranks 217th among the top 500 enterprises in China.

 

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-- © Copyright Reuters 2019-11-11

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Not many dead duck companies you can buy for a quid and sell for 70 million three years later having done very little.

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UK tv news indicating it's a done deal.

At least a few thousand jobs saved, for the moment anyway.

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Deal comes with mandatory Huawei 5G

  • Haha 2

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Sounds like they're making plans for Nigel.

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29 minutes ago, zydeco said:

Deal comes with mandatory Huawei 5G

Isn't that a 'geordie' phone?

It seems the Chinese were interested because the steel quality produced is higher quality than their home grown stuff. Big markets especially in the production of railway tracks from British Steel.

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And another western company goes to China. How long before they literally own the world?

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Brexiters do you start to speak Mandarin ? Soon you will need it !

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It will be interesting to see what kind of pay and conditions the Chinese - who have already relocated parts of their steel empire to low-wage economies like India - will seek to impose on their British workforce.

 

Ensuring their fair treatment could prove a major test of resolve for Boris and his pre-election pledge that, post-Brexit, UK employment protection rights will continue to match or surpass those of the EU.

Edited by Krataiboy
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same company, same products and the English can't manage it to make money but the "smart" Chinese can ? wohowww that says it all, when it comes to business Chinese outsmart (almost) everybody, now we know why Trump can't make a deal 555

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3 minutes ago, Krataiboy said:

It will be interesting to see what kind of pay and conditions the Chinese - who have already relocated parts of their steel empire to low-wage economies like India - will seek to impose on their British workforce.

 

Ensuring their fair treatment could prove a major test of resolve for Boris and his pre-election pledge that, post-Brexit, UK employment protection rights will continue to match or surpass those of the EU.

bad news for BJ employment pledge, Chinese will bring their own labor, same as they do in Africa

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