SHANGHAI: The merger between the Baoshan Iron and Steel Group (Baosteel)and its smaller rival Wuhan Iron and Steel was formally completed following a ceremony in Shanghai on Thursday, creating China’s biggest steelmaker.
The new Baowu Steel Group will have an annual production capacity of around 60 million tonnes, also making it the world’s second-biggest steelmaker, behind ArcelorMittal.
Baowu Steel has total assets worth 730 billion yuan ($106 billion) and a workforce of 228,000 people, it said in a press release.
The merger between the two steel companies was formally approved by China’s cabinet, the State Council, in September, as part of the country’s ongoing efforts to rationalize its sprawling state sector.
Earlier, the companies’ listed entities, Baoshan Iron and Steel Co Ltd and Wuhan Iron and Steel Corp , announced they would halt trading in their shares amid a review of the merger by regulators.
China aims to put 60 percent of the nation’s steel capacity in the hands of its 10 biggest firms by 2025 and has been encouraging acquisitions and mergers in the industry for years.
China is also seeking to cut the number of companies run directly by the central government as part of far-reaching reforms of state-owned enterprises.
The number now stands at 102, down from 111 at the beginning of the year. Chinese state media have reported it could eventually fall to 40.
