Liberty Acquires Rio Pinto To Build Up Its UK Footprint

Industrials group Liberty is set to acquire Rio Pinto’s aluminium smelter and hydro-electric power plants in Scotland for £330 million. Worries about loss of jobs among the 150 employees and 400 positions in the supply chain has been alleviated by the news that Liberty with its sister group Simec will acquire the business. The deal will be paid through a combination of equity and funds that will be raised through securitization.

Sanjeev Gupta, a commodities mogul, hopes to build up Liberty’s footprint in the United Kingdom. This latest acquisition will become part of the company’s privately-held group’s expansion strategy. Liberty has been buying distressed industrial companies in the UK. Most of these companies have to be put for sale because of high power prices, greater costs and global competition.

According to Gupta, their latest acquisition fits well with their vision to develop a sustainable and competitive metals industry in the UK and make it a global industrial business. The next step in the Scottish investment program is to create a springboard for bigger manufacturing growth. This will create more jobs for Scotland.

Last year, at the height of the steel crisis Liberty re-opened a steel plant located in Newport, Wales. Since then, the company has acquired several other assets from the steel giant Tata that is currently assessing its operations in the UK and Caparo, the industrial group that failed last year. Recently, Liberty has also reopened a mothballed steel plate mill located in Dalzell near Glasgow that the steel giant Tata has shut. In fact, Liberty has tried to buy all the steel assets of Tata in the UK but it merged with European rival, ThyssenKrupp.

The Lochaber business is somewhat unique because the smelter in Fort Williams is powered by two nearby hydro-electric plants with the capacity to produce 90 megawatts of power. The sale also included a 100,000-acre estate that will capture rainwater to power the generators.

Customers usually require a wide array of industry standard shapes of aluminium extruded from solid flat bars to round, square and rectangular tubing, channels and beams for architectural and structural applications. There are also shapes that can be custom designed or die manufactured to meet specifications.