(Yicai Global) Oct. 12 -- China Baowu Steel Group will take Sinosteel Group into its stewardship. The specific takeover plan is still in talks, the two new Sinosteel subsidiaries separately announced yesterday in a sign of China’s steel industry further integrating.
Sinosteel holds 54.6 percent stake in Sinosteel Engineering and Technology and 43.34 percent stake in Sinosteel New Materials. The two units’ actual controllers are the State-Owned Assets Supervision and Administration Commission of the State Council, and also Sinosteel’s, and so their controlling shareholders and actual controllers have not changed. The takeover will not involve a major asset restructuring of the subsidiaries and will not affect their normal operations, per their announcements.
This is a signal that the consolidation of the steel industry is still speeding up, the Securities Times reported, citing an analyst as saying the possibility of Shanghai-based Baowu Steel’s further asset expansion cannot be ruled out.
Bao Steel and Wuhan Iron and Steel Group merged in 2016 into Baowu Steel, which produced 95.46 million tons of the metal last year and reported CNY552.2 billion (USD82.5 billion) in operating revenue and CNY34.5 billion in net profit.
Sinosteel is a central enterprise under the SASAC that develops and processes metallurgical and mineral resources, metallurgical raw materials and trades products and provides logistics services, while plying related engineering technical services and equipment manufacturing businesses.
Baowu Steel acquired the 51 percent stake in Taiyuan Iron and Steel on Aug. 21 and took a 23.51 percent stake in Chongqing Iron and Steel Sept. 16 to become their actual controllers.
Editor: Ben Armour