Tata Steel UK has signed a definitive sale agreement to sell two of its pipe mills in Hartlepool to Liberty House Group, a London-based industrial and metals multinational of India-born entrepreneur Sanjeev Kumar Gupta.

“The transaction is expected to be completed within next few months," Tata SteelBSE 0.16 % UK said in a statement issued on Tuesday.

The companies did not disclose the deal size for the two mills that manufacture steel used in oil and gas pipelines and employ around 140 employees.

The deal comes soon after Liberty’s £100-million acquisition of Tata Steel UK’s Speciality Steels business employing more than 1,700 in Yorkshire, Lancashire and the West Midlands.

Tata Steel and Liberty House will work to complete consultations with employees and trade unions, as well as transfer of supplier and customer contracts. “As a responsible seller we have worked long and hard to find a sustainable future for the 42- and 84-inch pipe mills,” said Bimlendra Jha, CEO at Tata Steel UK.

With this sale, Tata Steel UK will complete its portfolio restructuring to focus on the strip products supply chain linked to Port Talbot. “The sale is also an important step towards developing a more sustainable future for the rest of our UK business,” Jha said.

Tata Steel will continue to be the largest steelmaker in the UK, employing almost 8,500 people, and manufacturing steel used in automotive and construction sectors.

With this acquisition, Liberty’s plate mills in Scotland as its Dalzell and Clydebridge plants would be able to supply steel plate to the Hartlepool pipe mills.

Liberty also intends to upgrade its steel making in Australia and the plate mill at Dalzell to be able to make high-grade API plate capable of being rolled into large diameter pipes at Hartlepool for oil and gas pipelines globally.

“This is set to become an important addition to our group,” said Sanjeev Gupta, executive chairman of the group. “This step will inspire investments not only in Hartlepool but also in our upstream plate mill at Dalzell, and potentially also at the steel shop at Whyalla in Australia in due course, to give us a fully-integrated world class capability to supply pipeline projects."

The addition of Hartlepool pipe mills, which have a combined production capacity of over 250,000-tonne a year, would bring Liberty’s UK workforce to nearly 5,000 people spread across more than 30 sites.

Post sale of the two pipe mills, Tata Steel will retain its 20-inch tube mill at the same Hartlepool site, which has nearly 270 employees and is supplied with steel coils from Tata Steel’s European steelworks and is part of its strip products supply chain. The mill makes high strength steel tubes for a range of markets, including construction, infrastructure and machinery and Tata Steel is poised to invest nearly £1 million to raise the mill’s production capability.