Chinese steelmaker China Baowu Steel is negotiating the acquisition of rival Magang Group, sources told Reuters, a deal which would create a national powerhouse to compete with US and European market leaders.
Baowu is currently China’s largest steelmaker and number two globally behind Luxembourg-based ArcelorMittal. Together with Madang, the combined output of the merged entity would already exceed that of the entire US at around 85 million tonnes per year. Last year ArcelorMittal exceeded this by about 11 million tonnes.
Talks are still at an early stage, the sources said, with details such as dates and prices yet to be finalised.
“(A deal) would be very reasonable and normal. After all, the two companies are geographically close,” one source said. “It would be easy… to collaborate and their products are complementary.”