Chinese Ansteel will officially take over Bengang

Ansteel Iron & Steel Group (Ansteel), a leading Chinese steel producer based in Liaoning province in northeast China, intends to formally acquire Bengang Group (Bengang), another state-owned plant in the province, following procedures by which Ansteel gains a controlling 51% shares. promotions have been completed. The acquisition could allow Ansteel to become the third largest steel producer in the world.

On August 20, Ansteel and the Liaoning Provincial Government Supervision and Management Commission (the current owner of Bengang) signed an agreement whereby the latter would transfer a 51% controlling stake in Bengang to Ansteel free of charge, according to both Ansteel and Bengang's listing companies. the same day.

However, no guidance was given as to when the transfer would be completed, as competition authorities in China and overseas must ensure that the union of the two steel companies does not violate competition rules.

But if there is no objection to the transfer, Ansteel will eventually take over 51% of Bengang and Bengang will become Ansteel's subsidiary, the report said.

The official announcements came in response to renewed market speculation about the likely merger of the two companies, which emerged in April after inactivity since the first initiative in 2005.

Following the takeover, Bengang Ansteel will become the third largest steel producer in the world after China Baowu Group and ArcelorMittal in terms of steel production.

In 2020, Ansteel and Bengang produced a total of 55.6 million tonnes of crude steel, with the first at 38.2 million tonnes, the seventh largest in the world, according to statistics from the World Steel Association. The latter produced 17.4 million tons, making it the 19th largest in Bengan.

The acquisition will also contribute to China's pursuit of a higher concentration in its steel industry, which aims to increase the share of the top ten steel producers to 60% of the country's total crude steel production by 2025. During 2020, the top ten factories contributed only 39%.