The largest metallurgical company in China absorbed its smaller competitor
China's Baowu Steel Group, the world's second largest steelmaker, is buying a majority stake in rival Magang Group Holding as China seeks to consolidate in the country's steel industry.
Magang-registered Maanshan Iron & Steel, published on the Shanghai Stock Exchange on Sunday, said the deal, signed on May 31, would give Baowu 51 percent of Magang's shares.
Baowu will also own 45.54 percent of the shares of China's Maanshan Iron & Steel, making it the controlling shareholder of the said company.
The cost of the deal was not disclosed. Earlier, on April 25, Reuters reported that Baowu was in talks to take over Magang.
According to the latest figures from the World Steel Association, Baowu became the second largest crude steel producer in the world in 2017, reaching a production volume of 65.39 million tonnes. Maanshan Steel ranked 16th with 19.71 million tonnes of products.
The top rated ArcelorMittal produced 97.03 million tonnes in 2017.
China has said it wants to concentrate 60 percent of its steel production capacity in the hands of top 10 national producers by 2020. In addition to consolidating the sector, China has closed small, polluting and inefficient factories to cope with overproduction of steel.
The transaction is subject to regulatory approval and must pass antimonopoly review.