MUMBAI: Tata Steel has initiated talks with the Klesch Group , a Swiss Investment bank with interests in commodities, to undertake "detailed due diligence and negotiations" for the possible sale of its long steel business and associated distribution activities in Europe.Tata Steel had made an audacious $12.04-billion bid for the Corus Group trumping a bid by Brazil ’s CSN in a nine-round auction process in 2007, a year before the financial crisis hit businesses in Europe and North America.Since then the company has been struggling to wring profits out of the European steel maker and has been looking to sell parts of its European steel operations as well as lower interest costs.A long-products manufacturing unit, distribution sites in the Teesside, Dalzell and Clydebridge in Scotland , an engineering workshop in Workington and a rail consultancy in York , besides other operations in France and Germany could be sold if the talks are successful, the Mumbai-based company said in a statement on Wednesday. About 6,500 people are employed at Long Products Europe and its distribution facilities, the company said. Tata Steel and Klesch Group entered into a memorandum of understanding (MoU), the statement said."We will now move into detailed due diligence and negotiations, though no assurance can be given about the outcome," said Karl Koehler chief executive of Tata Steel’s European operations. "We will regularly engage with the trade union representatives and works councils," he added.The initial reaction from trade unions indicated that they were not enamoured by the possible deal. BBC quoted Roy Rickhuss general secretary of the steelworkers’ union, community, as saying, "We’re extremely disappointed with the way that Tata Steel have handled this announcement, which does not reflect well on Tata values," he told BBC.In a joint statement, the unions that include Unite, Community and GMB expressed disappointment that the company failed to consult with them before making this move.But market participants were more supportive although they believe that the sale, if it happens, will be at a fraction of the purchase price of the assets in 2007. "It’s a good move but valuations will be a fraction of what was paid to acquire these assets," said Rakesh Arora , managing director and head of research at Macquarie Capital Securities In financial year 2012-2013, the company had booked a heavy impairment charge, writing down its goodwill and assets by $1.6 billion.Selling the long-steel products business makes sense as demand for these products were coming down in developed markets. "Long steel product outlook remains grim; demand is very weak. It would require a lot of consolidation on the part of industry to remain viable," Arora said.