The Miners

Shougang Steel may acquire Tonghua Steel

By Hao Yan (chinadaily.com.cn)
Updated: 2010-01-11 17:22

Beijing Shougang Steel Group is planning an acquisition of Tonghua Iron & Steel Group.

Sources had said that Shougang Steel and State-owned Assets Supervision and Administration of Jilin province had reached an initial agreement to pay some 2 billion yuan for a controlling stake in Tonghua Steel, according to Beijing News.

But Shougang Steel said the deal is still in the early stages of negotiation. "No decision has been made about whether the restructuring should go ahead or not. Therefore, financial details have not been worked out," the paper quoted the company as saying.

Earlier reports said Shougang Steel on Jan 6 sent about 30 staff from production, equipment, finance, and administration to Tonghua Steel to do a field study of the company. Tonghua Steel displayed welcome banners and cleaned up the site beforehand to show warmness to the team.

Last year, Tonghua Steel planned to be acquired by Beijing Jianlong Heavy Machinery Group, with subsidiaries operating iron and steel, resources, shipbuilding, and machinery, but the move was protested by a large number of workers.

Tonghua Steel is the largest iron and steel mill in Northeast China's Jilin province. The possible buyers include Beijing Shougang Steel, Angang Steel, Hunan Valin Steel.