Tata Steel is planning to sell its Long Products division, which employs thousands of workers at several sites in the UK.
The steel giant said it had signed a Memorandum of Understanding with the Klesch Group, an industrial company which operates across Europe, to take over Long Products Europe – which employs about 6,500 people including at its distribution facilities – and supply products for industries including construction and excavation.
The planned sale covers several UK-based sites including Tata Steel's Scunthorpe steelworks, mills in Teesside, Dalzell and Clydebridge in Scotland, an engineering workshop in Workington and a rail consultancy in York, as well as other operations in France and Germany.
Unions said they were disappointed with the way the announcement had been handled and were seeking talks to discuss any impact on jobs.
Karl Koehler, chief executive of Tata Steel's European operations, said: "We will now move into detailed due diligence and negotiations, though no assurance can be given about the outcome. We will regularly engage with our employees and other stakeholders throughout this process, and we will consult with the trade union representatives and works councils.”
Tata had already announced up to 500 job cuts last October in an effort to make the business more competitive, and Koehler said today that the sell-off was about concentrating their focus on core activites.
"Accelerating the pace of innovation on advanced steel solutions, helping our customers succeed in their markets and creating a sustainable asset base requires significant capital and expertise,” he said. "We have therefore decided to concentrate our resources mainly on our strip products activities, where we have greater cross-European production and technological synergies.
"We want to build a sustainable business in the UK and further develop our mainland Europe business and we are committed to providing the necessary leadership and financial resources to achieve that."
Steelworkers' union Community, Unite and the GMB said in a joint statement: "Tata Steel has failed to consult at all with the trade unions before making this move, which could have serious consequences for employees and contractors right across Tata Steel, not just within the Long Products business that it wants to sell.
"The unions have been treated with contempt in this process as the level of consultation that we would expect ahead of such a major strategic announcement has not taken place.
"We were made aware of this fait accompli two days ago, which is neither within the spirit nor the letter of long-standing Information and Consultation or European Works Council agreements. We want Tata Steel to take a step back and carry out the consultation with its unions, which it should have been doing in recent months when it was preparing to sell its assets.
"The fact that Tata Steel wants to abandon half of its European operations and pull out of an entire strategic market does not bode well for the future and ends Tata Steel's vision to be a global steel player.
"Tata Steel has long emphasised that its European operations are 'one company' but today's announcement is the final nail in that concept's coffin. We are calling on the government to intervene in the public interest to ensure a future for industrial assets of strategic importance to the UK's construction, infrastructure and manufacturing base.”
The Klesch Group is a global industrial commodities business, with three divisions specialising in the production and trading of chemicals, metals and oil. Founded in 1990 and headquartered in Geneva, it employs more than 2,000 people across 30 locations in more than 17 countries around the world.
Business Secretary Vince Cable said: "The next few months will be a time of uncertainty for the company and employees. The proposed sale shows the harsh reality of trading conditions in parts of the steel industry.
"I met the global head of Tata in India this week and he has personally re-affirmed to me his company's commitment to the British steel industry and to investing substantially in Port Talbot and strip steel.”