Yahoo! Australia & NZ News
China’s third largest steel maker Wuhan Iron and Steel Group and Liuzhou Iron and Steel Group, the largest steel maker in China’s southern Guangxi Autonomous Region, signed an agreement on reorganization here on December 19.
Under the agreement, Liuzhou Steel will invest all its net assets valued at 6.2 billion yuan and Wuhan Steel will invest 6.5 billion yuan (US$804.85 million) to jointly set up the Wugang-Liugang Group Co., Ltd. The new company is set to build modern iron and steel works in Fangchenggang, coastal Guangxi, with annual output of over 10 million tons.
This is a new major reorganization move among major Chinese steel makers following the consolidation of the Anshan Steel and Benxi Steel to form the Anben Group several months ago.
Owing to overcapacity, China’s iron and steel industry has ended its high-profitability era and a wave of mergers and acquisitions is now underway in the industry.