Top Chinese steelmaker China Baowu Steel Group is in talks to take over rival Magang Group, three sources familiar with the discussions said, a deal that would help entrench the nation’s position as a serious competitor in global steel markets.
The mega-marriage would sharply narrow Baowu’s gap with top-ranked international producer ArcelorMittal (MT.AS), and would be a major step in Beijing’s drive to consolidate its bloated steel industry. Baowu and Magang’s combined steel output last year surpassed total U.S. production.
It would mark the next big takeover in the country’s steel sector after Baowu, the world’s No. 2 steelmaker, was created by Baosteel Group’s 2016 acquisition of Wuhan Iron and Steel that valued the latter at about 3 billion yuan ($438 million).