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Two Chinese companies to merge & form world’s 3rd largest steel producer

Under a merger agreement signed on August 20, Ben Gang, currently owned by the Liaoning Provincial Property Management Committee, will donate 51% of the company’s shares to Ansteel, becoming its subsidiary, China’s news agency Xinhua reports. Both companies view the merger as a way of reorganizing and boosting industrial capabilities.

Through this reorganization, we will implement an integrated resource use and coordinated development in areas such as research and development, procurement and sales, and thereby contribute to the revival of Liaoning and the northeastern part of the country as a whole,” Ansteel’s chairman of the board Tan Chengxu said, calling the transition “a milestone in the development of Ansteel.”

The restructuring will now be reviewed under China’s anti-monopoly regulation by related government departments.

Upon completion of all merger procedures, Ansteel will have an annual production capacity of 63 million tons of crude steel, effectively making it the third in the world in terms of steel production after the Chinese Baowu Steel Group and ArcelorMittal, a Luxembourg-based multinational steel manufacturing and mining corporation.

By 2025, Ansteel plans to achieve annual production of 70 million tons of crude steel and 50 million tons of iron concentrate, boosting its revenue to approximately 300 billion yuan ($46.3 billion).

China, the world’s largest producer with 1.065 billion tons of crude steel output in 2020, is on course to restructure its crowded steel industry by forming a number of super-large steel conglomerates by 2025. They will consolidate up to 70% of China’s steel output in the hands of its top 10 steelmakers from some 37% they cover now, under a plan recently released by the country’s Ministry of Industry and Information Technology.

For more stories on economy & finance visit RT’s business section

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