Liberty Steel Group has completed the sale of its French steelmaking operations Liberty Ascoval and Liberty Rail Hayange to German steelmaker SHS -- Stahl-Holding-Saar, Liberty and SHS announced Aug. 5. SHS said the purchase will support its move toward production of green steel.
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The value of the deal was not announced. SHS, a producer of high-quality steel bars, wire rod, semi-finished and forged products, confirmed that its acquisition of the Ascoval specialty steel plant at Saint-Saulve, Nord, and the Hayange railmaking plant at Moselle has been formally validated by the French authorities.
The acquisition fits in with SHS Group's growth and diversification strategy, at the same time aligning with its mission of safeguarding the Saarland steel industry model, it said.
SHS, founded in 2001, became an operational management holding company in 2010, which has been actively supporting the two major Saarland steel companies, AG der Dillinger Hüttenwerke (Dillinger) and Saarstahl AG.
Troubled recent times
Liberty Steel Group has been seeking to divest some of its assets, particularly those with weak performance, since the collapse in March of Greensill Capital, the major financier of its parent company GFG Alliance, which pushed the group into a cash squeeze.
Liberty Steel Group has grown rapidly in recent years to become Europe's fourth largest manufacturer of steel products, with a 6 million mt crude steel capacity in the region. Of the group's steel rolling production capacity of around 18 million mt/year, some 10 million mt/year is in Europe.
Ascoval had been in administration prior to the acquisition of both Ascoval and Hayange by Liberty Steel Group in 2020. Both Ascoval and Hayange steel mills had originally been part of British Steel, which entered compulsory liquidation in May 2019 and was purchased by China's Jingye Group in March 2020.
In May this year, the French government loaned Eur20 million ($24.2 million) to Ascoval and Hayange to cover working capital and capital expenditure costs amid the cash squeeze, according to sources.
Other bidders for the two assets included major steelmaker ArcelorMittal and Italian long products maker Beltrame. As ArcelorMittal owns other steel rail production assets in Spain, Luxembourg and Poland, it is considered that the EU antitrust authorities might have stood in the way of the steel giant further bolstering its already dominant position in the EU rail market.
Green steel focus
Ascoval's production is based on electric arc furnace technology, which emits considerably less carbon than the blast furnace-based steelmaking route.
Hayange, which produces railway infrastructure products, will contribute to Europe's current drive toward sustainable mobility solutions, SHS said.
Both Ascoval and Hayange will now "gain access to new business fields, such as the automotive sector, and geographical markets, thanks to the SHS Group's worldwide sales network," SHS said in a statement.
Liberty Steel Group said in a separate statement that the two groups had recently collaborated to explore construction of an industrial scale hydrogen-based steelmaking project in France. "Liberty believes SHS/Saarstahl has a strong industrial concept similar to LIBERTY's GREENSTEEL model that will help secure the future of the businesses," it said.
SHS said it "focuses on the production of high-quality European green steel and is proud to be able to work together with the workforces of Ascoval and Hayange to realize this concept."