Posted on 23 Aug 2021
Ansteel Iron & Steel Group (Ansteel), a leading Chinese steel producer based in Northeast China’s Liaoning province, is set to officially take over Bengang Group (Bengang), another state-owned mill in the province, after procedures giving Ansteel a controlling 51% share have been completed. The acquisition may enable Ansteel to become the world’s third largest steel producer, Mysteel Global notes.
On August 20, Ansteel and the Liaoning provincial government’s State-owned Assets Supervision and Administration Commission (Bengang’s current owner) signed an agreement, whereby the latter will transfer a controlling 51% share in Bengang free of charge to Ansteel, according to announcements of the listed companies of both Ansteel and Bengang on the same day.
No indication was given as to when the transfer would be completed however, as anti-monopoly authorities in China and abroad must be satisfied that the union of the two steelmakers does not breach anti-trust regulations, Mysteel Global understands.
But assuming no objections are raised regarding the transfer, Ansteel will end up holding a 51% share in Bengang and Bengang will become a subsidiary of Ansteel, the announcements stated.
The official announcements were an answer to renewed market speculation over a likely merger between the two that emerged in April, after staying dormant since the first initiative in 2005, as Mysteel Global reported. [For details, please check our other story via this link: https://www.mysteel.net/article/5022557/FEATURE--Ansteel-and-Bengang-to-be-one-after-16-years.html]
After taking over Bengang, Ansteel will become the world’s third largest steel producer after China Baowu Group and ArcelorMittal in terms of steel output.
In 2020,Ansteel and Bengang produced 55.6 million tonnes of crude steel in total, with the former making 38.2 million tonnes to be the seventh largest in the world, according to statistics from the World Steel Association. The latter produced 17.4 million tonnes, ranking Bengang the 19th largest.
The acquisition will also be contributing to China’s drive towards higher concentration in its steel industry, which aims at raising the contribution of the top ten steel producers to 60% of the country’s total crude steel output by 2025. During 2020, the top ten mills contributed only 39%, Mysteel Global notes.
Source:Mysteel Global
