The U.K.’s Sheffield Forgemasters is being acquired by the Ministry of Defence (MoD) to support a substantial recapitalization of the company’s defense-critical plant and equipment over the next 10 years. The investment will secure Sheffield Forgemasters’ role as a critical supplier to the next generation of U.K. defense programs while continuing its independent commercial activities, serving markets such as civil nuclear, oil and gas, power generation, renewables and steel processing.

In order to modernize the company’s plant and equipment to support its role as a long-term supplier to U.K. defense, the transaction is structured to inject up to $563 million of new investment over the next 10 years into defense-critical assets, including plans for a new heavy forge line and building, a flood alleviation scheme and major machine-tool replacements. This is expected to retain and create new highly skilled manufacturing jobs within the Sheffield City region.

The transaction, which has the support of major shareholders who have agreed to sell their shares to MoD, is subject to a three-week offer period and will be completed on August 19, 2021. The MoD will acquire 100% ownership of Sheffield Forgemasters International Limited (SFIL), the parent company of the Sheffield Forgemasters Group. There will be no change to the corporate structure of the group and all subsidiary companies.