Report: Proposed Merger of China's Baosteel, Wuhan Iron and Steel Wins Regulatory Approval
09/19/2016 - A plan to merge two of China’s largest steelmakers into a single entity with more than 60 million tons of capacity has received regulatory approval, reports Caixin magazine.
According to the magazine, the State-Owned Assets Supervision and Administration Commission approved the merger of Baosteel Group and the smaller Wuhan Iron and Steel Corp. late this summer.
Although the merger would create a steelmaker second only to ArcelorMittal in size, it isn’t necessarily a threat, reports The (London) Telegraph.
“Mergers can be part of the slow process of consolidation, and in this case the two state-owned companies have vowed to cut capacity by 13.4 million metric tons between them,” the newspaper reported, citing the Caixin article.
“The nagging doubt is that steel is deemed a ‘strategic’ industry by Beijing, a term with specific meaning in Communist Party ideology,” it said.
Although the merger would create a steelmaker second only to ArcelorMittal in size, it isn’t necessarily a threat, reports The (London) Telegraph.
“Mergers can be part of the slow process of consolidation, and in this case the two state-owned companies have vowed to cut capacity by 13.4 million metric tons between them,” the newspaper reported, citing the Caixin article.
“The nagging doubt is that steel is deemed a ‘strategic’ industry by Beijing, a term with specific meaning in Communist Party ideology,” it said.
