Chinese state owned Baowu Steel Group inked an agreement with Magang (Group) Holding Co Ltd to secure a 51% stake in the latter. Mr Chen Derong, chairman of Baowu said the partnership was a continuation of the long-term cooperative relationship between the two, as well as a major move in pushing for the supply-side reform of the industry.
The merger is a big step in China’s ongoing consolidation of its steel industry and will help build a world-class steel mill with global competitiveness. Baowu is expecting its annual steel production capacity to increase from 70 million tonnes to 90 million tonnes by absorbing Magang. Formed by the consolidation and restructuring of former Baosteel Group Corporation and Wuhan Iron & Steel (Group) Corporation in 2016, Baowu is now the world’s second-largest steel producer.
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