Wednesday, June 11, 2008

China merger creates new No. 1 steel maker

Two steel makers in North China were scheduled to formally merge on Wednesday in a deal that would supplant Baosteel as the country's largest steel firm, state media said.
Hebei Iron and Steel Group was expected to launch operations with a capacity of 31.75 mn tonnes of steel a year, overtaking Baosteel to become the nation's No. 1 producer.

The new group was created from a merger between two leading steel companies in Hebei province, Tangshan Iron and Steel Group and Handan Iron and Steel Group, the report said.
Both companies declined comment when contacted on Wednesday. China's steel industry is undergoing consolidation partly in a bid to use resources more effectively and become more energy-efficient.
As part of the same consolidation drive, Baosteel, which has an annual capacity of more than 20 mn tonnes, acquired smaller players Shaoguan Iron and Steel Group and Guangzhou Iron and Steel Group this year.

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