BHP Billiton eyes Angang Steel’s state-held shares

BHP Billiton eyes Angang Steel’s state-held shares

Sources report that BHP Billiton plans to buy over 30 percent of Henan Province-based Angang Steel’s state-held shares at the price of RMB 3.15 per share. Such a move by BHP Billiton would need approval from the National Reform and Development Commission and China Securities Regulatory Commission. Officials at Angang Group have indicated that formal negotiations have not taken place yet. Insiders point out that BHP Billiton plans to become more involved in China’s markets. As Angang Steel is a state-owned enterprise, the cooperation with Angang is not easy to accomplish due to lengthy bureaucratic procedures. Angang Group holds a 64.7 percent stake in Angang Steel, purchased at RMB 3.06 per share. A number of foreign investors are negotiating with Chinese steelmakers about possible mergers and acquisitions. At the end of September, the world’s second largest steel producer, Arcelor, had reached a preliminary agreement with Laiwu Steel to purchase 50 percent of Laiwu Steel’s shares. Arcelor is now reportedly in negotiations with Qingdao Steel. On August 31, Daye Special Steel Company announced that Hubei Xin Yegang Company and Citic Square Investment Company, its second largest stockholder, had signaled their desire to purchase other shareholders’ stock. On July 15, Valin Pipe Company announced that Mittal, the world’s largest steelmaking company, would buy 36.67 percent of its shares, thus becoming Valin’s second largest stockholder. Some market players indicate that China’s iron and steel supply exceeds demand, and therefore restructuring is a must. Foreign-funded enterprises are taking advantage of this opportunity to carry out mergers and acquisitions. SteelOrbis Shanghai