Privatization of British Steel

Abstract

Abstract British Steel was privatized in December 1988 with the government retaining a ‘golden share’ as a barrier to take-over until the end of 1993. Since then, British Steel plc has maintained its profitability in boom and recession and held its position as one of the world’s lowest-cost steel producers. This paper was written as part of the privatization debate during 1988. By then, the British Steel Corporation had made a remarkable turnround from record-breaking losses to being highly cost efficient and profitable. The paper develops two themes. The first is the importance of a competitive product market as a source of efficiency. The second theme is the significance of a market for corporate control-take-overs and mergers-as an element in the restructuring of European steel. Privatization exposes British Steel to the market for corporate control.