China's Baowu Steel officially completes merger with Magang Group

In June 2019, a statement was posted on the website of Shanghai Stock Exchange that China's Baowu Steel Group, the world's second-largest steel producer, will acquire a majority stake in rival Magang Group Holding Co Ltd as China pushes for consolidation in its steel industry.

Now as per the market sources, both the companies have officially inked an agreement on Thursday (19 Sep'19) where Baowu Steel has acquired 51% in the Magang Group. The merger is a big step in China's ongoing consolidation of its steel industry and will help build a world-class steel mill with global competitiveness, according to the company.
Chen Derong, chairman of Baowu, said the partnership was a continuation of the long-term cooperative relationship between the two, as well as a major move in pushing for the supply-side reform of the industry.

Baowu ranked as the world's second-largest crude steel producer in 2018, with 67.43 million tonnes of output, the latest data from the World Steel Association showed. Maanshan Steel ranked 16th, with 19.64 million tonnes of output. Top-ranked ArcelorMittal produced 96.42 million tonnes in 2018.

With the merger, Baowu is expecting its annual steel production capacity to increase from 70 MnT to 90 MnT by absorbing Magang. Baowu Group is formed by the consolidation and restructuring of former Baosteel Group Corporation and Wuhan Iron & Steel (Group) Corporation in 2016.