Canada markets open in 4 hours 6 minutes
  • S&P/TSX

    20,602.10
    -91.69 (-0.44%)
     
  • S&P 500

    4,473.75
    -6.95 (-0.16%)
     
  • DOW

    34,751.32
    -63.07 (-0.18%)
     
  • CAD/USD

    0.7908
    +0.0022 (+0.28%)
     
  • CRUDE OIL

    72.01
    -0.60 (-0.83%)
     
  • BTC-CAD

    60,514.58
    -587.47 (-0.96%)
     
  • CMC Crypto 200

    1,221.70
    -11.59 (-0.94%)
     
  • GOLD FUTURES

    1,766.30
    +9.60 (+0.55%)
     
  • RUSSELL 2000

    2,232.91
    -1.54 (-0.07%)
     
  • 10-Yr Bond

    1.3310
    0.0000 (0.00%)
     
  • NASDAQ futures

    15,500.00
    -17.75 (-0.11%)
     
  • VOLATILITY

    18.62
    +0.44 (+2.42%)
     
  • FTSE

    7,050.15
    +22.67 (+0.32%)
     
  • NIKKEI 225

    30,500.05
    +176.71 (+0.58%)
     
  • CAD/EUR

    0.6712
    +0.0014 (+0.21%)
     

Sheffield Forgemasters nationalised after £2.6m takeover by MoD

·2 min read
<span>Photograph: John Giles/PA</span>
Photograph: John Giles/PA

The UK government has nationalised the defence manufacturer Sheffield Forgemasters to secure the supply of parts that are vital for the Royal Navy’s ships and submarines.

The Ministry of Defence said it would spend £2.6m to acquire the whole of the company, and planned to invest as much as £400m over the next decade to replace critical equipment and infrastructure required for the company’s military production capacity.

The development comes in the latest twist for one of Britain’s oldest companies, which can trace its origins to the 1750s as a small blacksmith’s forge before it became a properly commercial enterprise in 1805.

It has struggled commercially in recent decades as the British steel industry has come under intense pressure from cheaper competitors in countries such as China and India.

Sheffield Forgemasters had focused in recent years on producing specialist forgings and castings for submarine platforms and surface vessels for big manufacturers including Rolls-Royce, BAE Systems and Babcock International. Those companies provided guarantees to support the financing of the firm until the MoD provides it with cash to support its operations.

The deal will complete on 19 August, after the company’s shareholders agreed to sell. It will continue to be led by its existing management.

The takeover also represents an unusual move for a government led by the Conservative party, which has historically been opposed to nationalisation. However, the prime minister, Boris Johnson, has signalled willingness to take a more interventionist stance to protect British industry.

Union leaders welcomed the takeover. Steve Turner, Unite’s assistant general secretary for manufacturing, said: “It brings to an end years of instability for this historic 215-year-old 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.”

David Bond, Sheffield Forgemasters’ chief executive, said: “The agreement to bring the company under the ownership of the MoD provides a more secure future for the business and its people.

“Sheffield Forgemasters and its shareholders are not able to fund an investment of this size and so this acquisition marks the culmination of a process, started two years ago, that enables us to be a reliable and secure supplier to defence for the long-term.”

He added that the company would also seek to build products for offshore wind projects and nuclear power stations, although its focus would be the defence business.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting