A Spanish state-owned shipbuilder will buy Belfast-based Harland & Wolff in a rescue deal that will secure all four of its shipyards and save about 1,000 jobs.
Navantia is to acquire H&W’s Belfast shipyard, where the Titanic was built, as well as the Arnish and Methil yards in Scotland and the Appledore site in Devon, ending months of uncertainty for its employees.
The exact sum it paid for H&W’s assets was not disclosed, but had been reported to be £70m, while the UK government improved the terms of a £1.6bn contract to build three fleet solid support (FSS) ships, which supply Royal Navy vessels with dry goods such as food.
Talks between Navantia and the UK government had been taking place since H&W went into administration in September after ministers refused to provide taxpayer-funded support to keep it going.
The Spanish shipbuilder managed to secure a better deal on its FSS contract. Navantia UK is the lead partner on the construction of the ships, which will be built in Belfast, Appledore and Puerto Real, near Cádiz, in Spain and will support the Royal Navy’s UK carrier strike group.
The sweetened terms of the FSS deal were not released on the grounds of commercial sensitivity but it appears to push some of the financial guarantees on to Navantia and would no longer involve government loans to underpin the shipyards.
The business secretary, Jonathan Reynolds, told the House of Commons that government guarantees or loans to H&W would have risked an “eyewatering amount of taxpayers’ money”, which he said would have been deeply irresponsible.
He said the rescue secured “not only all four yards, but the jobs in the Belfast yard for three years, and for two years in the three other yards”. He also said there would be “no large foreseen delay” in the delivery of the three FSS vessels.
The deal is being seen as part of the UK government’s effort to “reset” relations with the EU and forge a new security and defence pact with the bloc.
Navantia is wholly owned by the Spanish state and is involved in six European defence fund projects worth €520m (£430m), including those under the Permanent Structured Cooperation (Pesco) treaty framework.
The deal comes weeks after the Spanish economy minister, Carlos Cuerpo, met the UK chancellor, Rachel Reeves, and Reynolds, in London.
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The Northern Ireland secretary, Hilary Benn, said the deal ensured the delivery of the FSS programme to build three Royal Navy ships. In Belfast, about 500 jobs will be protected by the deal.
Navantia, which already has a relationship with the Belfast shipyard, said the deal would “enhance UK shipbuilding, defence and offshore wind industry capabilities”.
The defence secretary, John Healey, said the agreement would keep “vital defence manufacturing in the UK” and strengthen sovereign capability to support the Royal Navy while delivering growth.