China’s regulator has approved Baowu’s takeover of Shangang

China’s State Administration for Market Regulation has granted permission to Baowu Steel Group (Baowu), the world’s largest steelmaker, to acquire state-owned Shandong Iron & Steel Group (Shangang), SteelMint reports citing Mysteel Global.

Shangang was established in 2008 through the integration of two state-owned steel mills, Ji’nan Steel and Laiwu Steel, in Shandong Province. With an annual steel production capacity of over 30 million tons, the company’s steel products mainly include plates, long products, sheets, specialty and structural steel.

According to the regulator’s release, the merger of Shangang and Baowu will not violate antitrust laws, but it does not specify what other government approvals are required for the acquisition.

According to WorldSteel, Shangang’s steel output in 2022 amounted to 29.4 million tons. The company was ranked seventh among Chinese steelmakers and eleventh in the world.

The acquisition of Shangang by Baowu is another step towards consolidating China’s domestic steel industry. In 2019-2022, Baowu acquired Magang, Taiyuan Iron & Steel and Xinyu Iron & Steel.

In 2022, China’s Baowu Group strengthened its position as the largest steel producer. At the end of last year, Baowu Group produced 91.4% (or 63 million tons) more steel than ArcelorMittal, a steel corporation registered in Luxembourg, which, like in 2021, was second on the list. The share of the top 10 largest steel companies in the world (six of them are Chinese) in global steel production decreased to 27.71% in 2022, down from 27.85% in 2021.