Government considers Sheffield Forgemasters takeover
The Ministry of Defence (MoD) is in talks with Sheffield Forgemasters about acquiring control of the company, according to weekend media reports.
The company makes steel for nuclear submarines and is seen as a critical part of the UK national security’s manufacturing supply chain.
An MoD spokesperson said: “Sheffield Forgemasters is a strategic supplier to our programme and therefore we are in regular dialogue with them.
“It would be inappropriate to comment further due to commercial sensitivities.”
Five years ago it had a rescue deal from a state-owned Chinese company blocked by ministers. It went on to receive support from BAE Systems,Babcock International and Rolls-Royce Holdings, who together stepped in to underwrite £30m of bank lending.
The Government introduced the National Security and Investment Bill last month which would give it much greater powers to scrutinise foreign investment and intervene in mergers and acquisitions on the grounds of national security.
The news of this potential deal follows a move by the MoD at the start of November to turn Atomic Weapons Establishment – another key supplier of the nuclear weapons programme – into an Arms-Length Body, wholly owned by the MoD.
Sheffield Forgemasters, which recently took home two awards at TheBusinessDesk.com’s 2020 Yorkshire Business Masters, is reportedly of interest to defence bosses who are looking to shore up the supply chain for Britain’s submarine fleet.
It is reported that a full takeover of the business was only one of the options being explored and that any agreement was likely to be several months away. The MoD has appointed Deloitte to advise on talks with Sheffield Forgemasters.
David Bond, Sheffield Forgemasters, CEO
In a statement, David Bond CEO at Sheffield Forgemasters said: “Our long-term relationship with UK Defence prime contractors and the MoD is based on the critical work we do within the submarine programme and we will not comment on matters regarding our defence work.”
Forgemasters’ work for the MoD is highly confidential, but it is involved in developing advanced components for the country’s fleet of four nuclear submarines. However aside from the defence work, any potential bid could also impact Forgemasters’ other work in the renewable energy sector, an area that clearly is key to the government’s ambitions to rebuild the economy through a “green industrial revolution”.
The company announced plans to cur nearly 100 jobs in October – around one in seven jobs at the manufacturer – as a result of “a significant downturn for commercial work driven by the pandemic”.
