BHP Billiton eyes Angang Steels state-held shares
Sources report that
BHP Billiton plans to buy over 30 percent of Henan Province-based
Angang Steels 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
Chinas 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 worlds second largest steel producer, Arcelor, had reached a preliminary agreement with
Laiwu Steel to purchase 50 percent of
Laiwu Steels 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 worlds largest
steelmaking company, would buy 36.67 percent of its shares, thus becoming Valins second largest stockholder.
Some market players indicate that
Chinas 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