Liberty Steel Group, part of the Sanjeev Gupta’s GFG Alliance, today announced that it has been named preferred buyer for Bayou Steel, the US firm which has been in administration since the end of September.
The deal, which is worth $28m (£21.7m), would see Liberty upgrade and modernise Bayou’s idled steel mill in LaPlace, Louisiana.
The aim is to restart recycling operations in the second half of 2020 and steel making operations by 2021.
Bayou adds scale to Liberty’s US steel business, which includes existing operations in Illinois, Ohio, New Mexico and South Carolina.
The group is pursuing a ‘Greensteel’ strategy of focusing on renewable sources of energy and recycled materials, with a view to moving towards carbon neutral steel production by 2030.
Commenting on the acquisition, Sanjeev Gupta, Executive Chairman of GFG Alliance said: “We look forward to welcoming Bayou Steel into the GFG Alliance family. While the plant requires upgrades to be restarted competitively, we see good potential for the business.
“Bayou benefits from reliable access to supplies of recycled steel, competitive power prices and its own deep-water port.”
Once fully upgraded, the plant will bring Liberty’s total production capacity in the US to 3m tons per annum, moving closer to its target of an aggregate 5m tons.
In October it was announced that Gupta’s family-owned conglomerate, today announced plans to merge its worldwide steel plants into one global business worth $15bn.
The Liberty Steel Group, which will combine operations in the UK, Europe, USA and Australia, will be incorporated by the end of the year.
The business will empoy 30,000 people in ten countries and will become the world’s eighth-largest steel producer outside China, with a total capacity of 18m tonnes a year.