The State Assets Supervision and Administration Commission of China (SASAC) has authorized the Baowu Steel Group to acquire state-owned company Sinosteel.
Starting in October 2020, Baowu Steel has already been operating in the state-owned Sinosteel. In fact, Baowu Steel was already exercising external management over Sinosteel, which then faced serious financial problems because of high debts. The merger is expected to improve joint business efficiency and bring economies of scale.
Sinosteel is not engaged in steel production, however, its activities are closely related to the steel industry. More specifically, the company is a supplier of raw materials and holds minority stakes in a number of iron ore companies throughout the world.
The company also produces industrial equipment and offers various technological and engineering services. The Baowu Steel Group’s facilities produced approximately 120 million tons of steel in 2021.
The Group expects to boost this figure to 200 million tons by 2025 through mergers and acquisitions, while by 2035 it expects to concentrate 15% of assets in the global steel industry.