China Baowu Group reorganized Magang Group to make billion tons of steel group
On May 31, 2019, China Baowu Iron and Steel Group Co., Ltd. (hereinafter referred to as China Baowu) signed a free transfer agreement with the State-owned Assets Supervision and Administration Commission of Anhui Province. The State-owned Assets Supervision and Administration Commission of Anhui Province has 51% stock holdings of Ma Iron and Steel Group (hereinafter referred to as Magang Group) which will be transferred to China Baowu free of charge.
This reorganization is an important measure to implement the Party Central Committee and the State Council on promoting the healthy development of China's steel industry, deepening the adjustment of the state-owned economic layout, implementing supply-side structural reforms and accelerating the merger and reorganization of overcapacity industries. And it is also to meet to serve the government's strategy of "Chang River Ecomonic Belt", the objective requirements of strengthing regional ecomonies' coordinated development, and the key measure for cultivating world-class enterprise groups with international competitiveness.
China Baowu strategic plan clearly stated that it is necessary to strive to create “100 million tons of Baowu” with the vision of “becoming a leader in the global steel industry”. On one hand, the reorganization of China Baowu and Magang will drive Magang to achieve leap-forward development, strengthen the state-owned economy of Anhui Province, promote the development of steel and related industries, and promote the transformation and upgrading of Anhui's industrial structure and achieve higher quality development. On the other hand, the reorganization will promote the great vision of China Baowu “becoming a leader in the global steel industry” and further build a world-class technological innovation, industrial investment and capital operation platform in the steel industry.
China Baowu was jointly reorganized by the former Baosteel Group Co., Ltd. and Wuhan Iron and Steel (Group) Co., Ltd., and was unveiled and built on December 1, 2016. The steel production capacity is 70 million tons, ranking first in China and second in the world. China Baowu is also the most modern and competitive steel conglomerate. China Baowu is a pilot enterprise of the state-owned capital investment company. In 2018, its total assets were 7188 billion yuan, the crude steel output was 67.25 million tons, the operating income was 438.6 billion yuan, and the total profit was 33.84 billion yuan, ranking the 162th in the Fortune World 500.
Magang Group is located in Ma'anshan City, Anhui Province. It is a large-scale iron and steel joint enterprise in China and is authorized by the Anhui Provincial Government. Magang Group's total assets in 2018 was 97.04 billion yuan, achieving a crude steel output of 19.64 million tons, operating income of 91.8 billion yuan, and total profit of 8.945 billion yuan. Magang Group has a production scale of 20 million tons of steel, forming the four major steel production bases of Maanshan Iron & Steel Co., Ltd., Changjiang Iron and Steel, Hefei company and Wadun company.
The above reorganization needs to be reported to the State-owned Assets Supervision and Administration Commission of the State Council for approval, and the procedures for anti-monopoly review and domestic and foreign offer exemptions are fulfilled.
Source: China Baowu Group