Announced yesterday (28 July 2021), the deal itself will see the MoD spend just £2.56 million on the company, acquiring 100 per cent of the share capital at an offer price of 121 pence per share. According to Forgemasters, the transaction is subject to a three week offer period but has the support of all major shareholders and should complete on 19 August.
The acquisition brings to an end an extended period of uncertainty for the legacy manufacturer, which has been in existence for 215 years. As a major supplier to the Royal Navy for its submarine and shipbuilding programmes, Sheffield Forgemasters has long been seen as a strategic asset for UK defence. Other key sectors the company operates in include nuclear and offshore wind. The £400m investment over the next decade will support a new heavy forge line and building, a flood alleviation scheme, major machine tool replacements and a site-wide HV upgrade.
“Whilst securing defence output is the priority moving forward, the Group will continue to operate in commercial markets with its existing equipment and will also look to exploit opportunities that may arise from the UK Government’s net zero carbon agenda, including the offshore wind and civil nuclear markets,” Sheffield Forgemasters said in a statement.
Welcoming yesterday’s announcement, Unite's assistant general secretary for manufacturing, Steve Turner said: "This is the news we've waited two years to hear. Unite has been engaged in a long battle with the Ministry of Defence and the UK government to protect UK steel supply to our defence and nuclear programmes so today’s news will be welcomed with a huge sigh of relief right across our steel communities.
"It brings to an end years of instability for this historic...company, but is also a sign that government is maybe finally waking up to a crisis of its own making. Critical infrastructure industries like steel function better in public hands and advanced economies like our own need to have stable, secure domestic steel production capabilities to protect our national security interests as well as to compete in global markets.”