French government could spike British Steel sale

The finance minister of France has reportedly indicated he intends to place a hurdle in the way of the proposed sale of British Steel to China-based Jingye Steel. British Steel owns and operates a steel rail mill in Hayange, France.

According to an online report by the British Broadcasting Corp. (BBC), French Finance Minister Bruno Le Maire has threatened to veto a deal that was agreed to in November 2019.

At that time, Jingye agreed to pay about $66 million for British Steel. That company, founded in 2016 but reviving a decades-old name, employs about 4,000 people at mill locations in the United Kingdom, the Netherlands and France.

British Steel was placed in a state of “compulsory liquidation” by the British government in May 2019 before the potential sales agreement was reached with Jingye six months later.

According to the BBC report, Le Maire is pointing to the Hayange rail mill’s designation as a “strategic national asset” as his reason to delay or stop the transaction. Rails made at the mill are supplied in part to France’s national railroad company, and Le Maire has reportedly indicated he is opposed to Chinese ownership.

British Steel and Jingye were reportedly aware of the possibility of France’s objection, and the Hayange plant “has already been advertised for sale separately from the U.K. operations, apparently with the blessing of the French authorities,” according to the BBC.

Should the entire deal with Jingye fall through, the BBC indicates Turkey-based conglomerate Cengiz Holdings has declared itself a candidate to make a bid for British Steel’s assets.

A “fallback option,” according to the BBC, would involve Jingye buying all British Steel assets except for the French rail mill.

The other assets include a wire rod mill in the Netherlands; a large steelmaking complex in Scunthorpe, U.K.; a mill producing construction steel in Middlesbrough, U.K.; and a steel profiles facility in Saltburn-by-the-Sea, U.K.