Chinese steelmaker Baowu Steel is gearing up to acquire the state-run Sinosteel Group. Sinosteel’s subsidiaries announced the possibility of their integrations into the Chinese steelmaker. Sinosteel Engineering & Technology and Sinosteel Anhui Tianyuan Technology disclosed in exchange filings that it intends to be managed by Baowu Steel.
Sinosteel Group deals in mineral resources development, trading and equipment manufacturing. If finalised, the acquisition would be the third takeover by Baowu steel in 2020 and won’t involve a major change to normal operations or asset restructuring of the subsidiaries.
Sinosteel Engineering and Equipment announced on Oct 11 that the acquisition is still under negotiations. The company is presently working with 86 subsidiaries in China and abroad. Sinosteel holds a 54.6pc stake in Sinosteel Engineering and Technology and a 43.34pc stake in Sinosteel New Materials.
In 2016, Baosteel and Wuhan Iron and Steel Group merged into Baowu Steel. Baowu’s crude steel production in 2019 was 95.46mn mt and it reported operating revenue of CNY552.2bn ($82.5bn) and net profit of CNY34.5bn.
Baowu had earlier acquired a 23.51pc stake in Chongqing Iron and Steel on Aug 21 and a 51pc stake in Taiyuan Iron and Steel Company on Sept 16 this year. Baowu steel has exceeded its target of 100mn mt per year steelmaking capacity earlier than planned.
($1=CNY6.75)