Wuhan Iron & Steel (Group) buys into Kunming Iron & Steel Co.

Wuhan Iron & Steel (Group) buys into Kunming Iron & Steel Co.

Updated: 2007-08-03 Source:China Knowledge




Wuhan Iron & Steel (Group) Corp<600005> has confirmed it will buy a 48.41% stake in the steelmaking unit of Kunming Iron & Steel Co.

A source from Wuhan Iron & Steel (Group) said the company will be paying cash for the 48.41% stake, although the amount has not been confirmed, the Wall Street Journal said. China Business News reported Thursday however that Wuhan Iron & Steel (Group) will pay RMB 3.6 billion for the stake, though it didn't cite a source.

After the deal, Wuhan Iron & Steel (Group) will be the largest shareholder in Kunming Iron & Steel Co., followed by Kunming Iron & Steel (Group), which will hold a 47.41% stake, WSJ said. At present, Kunming Iron & Steel (Group) now holds 91.9% of Kunming Iron & Steel Co. the report said.

This move fits well with China's plan to consolidate her steel sector, as she tries to eliminate inefficient operators and develop internationally competitive champions. Beijing has targeted to have two or three leading steel groups with a production capacity of 30 million metric tons each by 2010, WSJ reported.