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The British investor Michael Flacks is reportedly “very” interested in buying British Steel and combining it with another plant in Italy, in a deal that would create one of Europe’s largest metals groups.
The businessman’s Miami-based investment group, Flacks Group, specialises in buying distressed companies and is working with bankers to prepare a bid for government-controlled Scunthorpe steelworks, the Financial Times reported.
“Somebody has to take control of British Steel. It’s a plant of national importance,” he told the FT. “I see an amazing opportunity where most people have overlooked this sector. I’m a big, bullish believer.”
Flacks’s approach would mark the latest attempt to transform the loss-making manufacturer, which employs 3,500 people at its plant in Scunthorpe, into a viable business.
The private equity group Greybull Capital bought British Steel in 2016 but it collapsed into insolvency three years later. China’s Jingye Steel then bought it in early 2020, but the government stepped in last year with emergency legislation to take over management of the steelworks amid fears that its owner was planning to walk away.
British Steel and other producers have been hit by a global glut of steel from China that has driven down prices. Over the past three decades the country has transformed from a minor player to the world’s largest producer, making more than half of global output in 2024.
Officials have tried to increase British Steel’s output in order to raise profitability, after Jingye claimed the Scunthorpe operation was losing £700,000 a day when it announced plans to close the site in March.
Flacks Group is already in talks to buy the former Ilva steelworks in southern Italy, and said late last year it was lining up €5bn (€4.3bn) of financing to turn it around. Flacks reportedly plans to roll the two producers together to take advantage of a growing preference from European companies and governments for local suppliers.
“My vision is we’re going to do a roll-up of European steel operations,” Flacks said. “There’s going to be an infrastructure growth. People are going to be more receptive to working with British Steel because it won’t be in Chinese hands.”
Flacks, who has a background in the retail industry, is estimated to be worth nearly £1.7bn, according to the Sunday Times Rich List, and has investments in industry and property.
In 2019, Flacks made a £20m attempt to buy the retailer Laura Ashley, having explored a takeover of the discount chain Poundworld the previous year. Both companies eventually fell into administration.
Flacks told the FT he would buy British Steel with the aim of being a long-term owner of the Scunthorpe site. “Every deal I do is complicated,” he said. “We’re not private equity, we’re not a listed company, we don’t have shareholders to answer to. We’re in it for the long game.”
Flacks and the Department for Business and Trade declined to comment. British Steel was approached for comment.
