Baosteel and Wuhan Iron and Steel merged officially, giving birth to the world’s second-largest steel manufacturer

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Another giant has been born~~ Baosteel and Wuhan Iron and Steel merged officially, giving rise to the world’s second-largest steel company. Baowu Steel Group, formed by the merger of these two major state-owned steel enterprises in China, announced its official establishment on Thursday (December 1), becoming China’s largest and the world’s second-largest large-scale steel company. As a pilot enterprise for state-owned capital investment companies, Baowu Group will gradually transition toward capital management in the future, expanding its business scope slightly to include areas upstream and downstream of the steel industry chain. It will accelerate the implementation of the \"one core, two wings\" strategy, with the steel industry as the core element, and green, high-quality, intelligent manufacturing as well as platform-based services within the steel ecosystem serving as the two supporting elements. Ma Guoqiang, chairman of Baowu Group, said, “Baowu Group will fully leverage the advantages of its integrated strategy and large-scale operations, continuously improving aspects such as scale, product variety, cost, technology, and service, in order to further enhance its international competitiveness.” ” The merged Baowu Group will have 228,000 employees, total assets of around 730 billion yuan, and operating revenue of 330 billion yuan. Last year, the combined crude steel production of Baosteel and Wuhan Iron and Steel was 61.89 million tons. This Monday (November 28), the share swap merger plan between Baosteel Co., Ltd. and Wuhan Iron and Steel Group Co., Ltd. was approved by the shareholders’ meetings of both companies. This restructuring by Baowu makes it the first case in the industry where a group restructuring and the merger of listed companies are carried out simultaneously within a state-owned enterprise. The merged listed company will swiftly transfer and integrate the product strengths of each party in areas such as automotive steel sheets, silicon steel, tin-plated sheets, and engineering steel, thereby rapidly enhancing its manufacturing capacity for high-quality steel. It will also benefit from an increase in the scale of procurement of raw materials and spare parts, as well as from improvements in logistics and warehousing management, all of which will help reduce the company’s overall procurement costs ； It will integrate the marketing service systems of both parties, and through the steel service platform Ouye Yunchang, build a competitive shared ecosystem for steel services. In November this year, Baosteel Group announced that it would accelerate the process of reducing excess production capacity. The original goal of cutting 9.2 million tons of excess steel production capacity over three years from 2016 to 2018 was revised to reduce 11 million tons of capacity within just two years, from 2016 to 2017. Previously, in September, the State-owned Assets Supervision and Administration Commission approved the renaming of Baosteel Group to China Baowu Steel Group Co., Ltd. As the parent company following the restructuring, Wuhan Iron and Steel (Group) Company was transferred to it entirely without compensation, becoming its wholly-owned subsidiary. Baosteel Co., Ltd., a subsidiary of Baosteel Group, plans to carry out a share swap merger with Wuhan Iron and Steel Co., Ltd.; the share exchange ratio between Wuhan Iron and Steel Co., Ltd. and Baosteel Co., Ltd. is 1:0.56.