Chinese steelmaker Shandong Iron and Steel Group (Shangang) will complete its acquisition of Shandong Province-based steel producer Rizhao Group before November 30 this year, according to report published on September 2 by Rizhao Group stakeholder Kaiyuan Holdings.
Kaiyuan Holdings has 20 percent, 30 percent and 35 percent stakes in Rizhao Steel, Rizhao Steel Section and Rizhao Rolled Steel respectively, all of which are subsidiaries of Rizhao Group. According to the Kaiyuan Holdings report, the three Rizhao Group subsidiaries have signed a second merger contract with Shangang, in line with which the assets of the three companies will be acquired at the same time, auditing and asset assessment will start immediately, and the parties will negotiate on the final acquisition price. The transaction is to be completed before November 30.
On September 6, 2009, Shangang and Rizhao Group signed a restructuring agreement. After the takeover, Rizhao Group will be formed into a new company called Shangang Steel Rizhao Company, which will be a premium steel production base with an annual output of 20 million mt. Rizhao Group and Shangang will hold 33 percent and 67 percent stakes respectively in the new company.