The deal amounted to 4.26 billion yuan ($630 million)
Chinese steel company China Baowu Steel Group announced the acquisition of 51% of the shares in the largest steel producer in Jiangxi province – XinSteel. China business law journal informs about it.
The deal was worth 4.26 billion yuan ($630 million) and was advised by JunHe and Clifford Chance.
Xinyu Iron and Steel, a subsidiary of XinSteel, is a major steel producer with production volumes reaching 9.38 million tons in 2020. After the deal was concluded, the enterprise became state-owned, as Baowu Steel is owned by the state.
Baowu was established in 2016 through the reorganization of the former Baosteel Group and Wuhan Iron and Steel Group.
The reorganized company already owns Magang Group, Taiyuan Iron and Steel Group, Chongqing Iron and Steel, Kunming Iron and Steel and Tibet Mineral Development. In addition, Baowu was authorized to manage Sinosteel Group and announced a merger with Shandong Iron and Steel in July last year.
As GMK Center reported earlier, in January-June 2022 Baowu Group produced 61.5 million tons of steel. Operating revenue for the period was $73.6 billion, while gross and net income was $4.8 billion and $4.1 billion, respectively.
In 2021, Baowu Group produced 120 million tons of steel, ranking first in the world. For the first time, the company has taken a leading position in global steel production with an indicator of 115 million tons in 2020.
China is the largest steel producer in the world. In 2021 Chinese steelmakers reduced steel production by 3% compared to 2020, to 1.03 billion tons.