The European Commission has given British Steel the green light to take over Sogerail of France, which would make it the largest producer of steel rail in the European Union.
A British Steel spokesman said that the £50m-plus deal was likely to be concluded within weeks.
Lorraine-based Sogerail has a strong presence in the rail-steel market in the Americas and western Europe, especially France, while British Steel’s sales have focused on Britain, Europe – including eastern Europe – north Africa, Asia and the Middle East.
`We’re big in the UK, they’re big in France. A deal would consolidate both companies in Europe, and we would be looking to extend product ranges in different countries,’ said the spokesman.
British Steel, which is in the process of a £3bn merger with Dutch steel maker Hoogovens, has made no announcement yet about Sogerail’s 520-strong workforce, but the company’s future will be linked to that of its existing heavy-section mill in Workington.
Sogerail is a subsidiary of French company Usinor, which wants to withdraw from carbon steel long products to concentrate on flat products and stainless steel.