On December 28, the government of Shandong Province inked a strategic cooperation framework agreement and relevant investment agreement with major Chinese steelmaker Baowu Group, according to which Baowu Group has officially become an investor in Shandong Province-based Chinese steelmaker Shandong Iron and Steel Group.
China Baowu Group and Shandong Steel Group rank first and the seventh in terms of crude steel output in China, producing 131 million mt and 29.42 million mt in 2022, respectively.
In 2022, China Baowu Group posted a net profit of RMB 16.7 billion ($2.4 billion), while Shandong Steel Group registered a net loss of RMB 247 million ($34.8 million).
Since 2019, China Baowu Group has acquired several regional steelmaking enterprises, including Anhui Province-based Chinese steelmaker Ma’anshan Iron and Steel Group, Shanxi Province-based Taiyuan Iron and Steel Group and Jiangxi Province-based Xinyu Iron and Steel Group, by means of free transfer of state-owned equity, becoming the largest shareholder in those steel groups.
However, this time, China Baowu Group will hold 49 percent equity in Shandong Steel Group based on negotiations between the two parties, while Shandong Provincial State-owned Assets Supervision and Administration Commission will still be the largest shareholder with 51 percent of equity.
Earlier this month, it was announced that Baosteel, a subsidiary of China Baowu Group, will acquire 48.6139 percent equity in Shandong Steel Rizhao Co., Ltd at a price of RMB 10.703 billion ($1.5 billion).