Chinese steel giant Baowu Group plans to transfer 2.19 percent equity in its subsidiary Baosteel to another Chinese steel giant Shougang Group for free, as announced by Baosteel on December 11.
After the transfer, Baowu Group will hold a 61.93 percent stake in Baosteel, while Shougang Group will hold a 2.19 percent stake.
As previously reported by SteelOrbis on November 25, the State-owned Assets Supervision and Administration Commission of Beijing’s municipal government approved the transfer by Shougang Group of a 15 percent stake in Beijing-based steel subsidiary Shougang Co., Ltd. to domestic steel giant Baowu Group for free. After the transfer, Shougang Group will hold a 64.38 percent stake in Shougang Co., while Baowu Group will hold a 15 percent stake.
Market analysts have indicated that the strategic cooperation between Baowu Group and Shougang Group constitutes a new model of slow blending via cross shareholding and joint investment, which will likely be followed by other enterprises, and lead to the merging of companies in the end.