BAOSTEEL, Mar. 4 -- Yesterday, Bank of Communications and Baosteel Group signed the contract, and the former will provide RMB 750 million mt for Baosteel to acquire 56.15% stake of Ningbo Steel.

    On Monday, Baosteel Group and Hangzhou I/S Group signed an agreement to reconstruct Ningbo Steel. Ningbo Steel has registered capital of RMB 3.6 billion, according to the agreement, Baosteel will acquire 56.15% shares of Ningbo Steel with RMB 2,021,400,000, becoming its largest shareholder, and the former major shareholders of Hangzhou I/S will hold the remaining shares.  

    This merger is the first reorganization case in domestic steel industry after the introduction of adjustment and revitalization plan for steel industry, and the insiders believed there would be more mergers and acquisitions in steel industry. “Stimulus plan for steel industry” stipulates that the government will introduce more policies to encourage Baosteel, Anben Steel and Wuhan I/S to play a vanguard role in domestic merger and acquisition and strive to form several super-large iron and steel groups with annual capacity of more than 50 million mt and international competitiveness, such as Baosteel, Anben Steel, Wuhan I/S, etc. by 2011.

    Baosteel is China's biggest steel enterprise, some analysts believe Hangzhou I/S Company may be the nest reorganization target of Baosteel after Ningbo Steel.  

    Merger and reorganization are one of main lines of China's iron and steel industry in recent two years, the data show that last year a total of 17 mergers and acquisitions appeared in steel industry, for example, Baosteel reconstructed Shaoguan I/S and Guangzhou I/S, Wuhan I/S reconstructed Liuzhou I/S, the establishment of Shandong I/S Group and Hebei I/S Group, etc.   

    For more information, please refer to http://cbimetal.cbichina.com

    (Edited by CBI China)