With the continuous recovery of the steel market, the industry’s long-awaited merger and acquisition wave finally emerged. On the September 30, the announcement said that the Chongqing Iron and Steel managers received a letter from the four sources of funds and Chongqing war new fund due to optimistic about the Chongqing Iron and Steel after the reorganization of the prospects for the development of steel, to be jointly funded the establishment of steel platform companies as investors to participate in Chongqing Iron and Steel reorganization.
For a long time, China’s steel market concentration is not high, although the Ministry of Industry, China Steel Association and the industry have been calling for increased industry consolidation, but the merger is still less.
For Baowu Iron and Steel and its predecessor, Baosteel Group, which is one of the few major mergers and acquisitions in China’s steel market, had annexed the eight steel group and the Shaogang Iron and Steel Group, the two are Xinjiang and Guangdong two regions the largest iron and steel enterprises.
In 2016, Baosteel Group to the Wuhan Iron and Steel Group to implement the strategic reorganization, which merged into Baosteel’s subsidiary, Baosteel also changed its name to Baowu Group, which became China’s steel industry one of the largest mergers and acquisitions ever.
When launching the four-source fund, Ma Guoqiang, chairman of Baowu Group, made it clear that “through the market-oriented, professional operation, global resources grafting, help the Chinese steel industry to remove excess capacity, clear zombie enterprises to speed up mergers and acquisitions , to improve industrial concentration, the implementation of mixed ownership, and promote new international production capacity cooperation, so as to effectively release the industry stock assets and optimize the efficient allocation of resources.