Guangdong Province-based Chinese steelmaker SGIS Songshan Co., Ltd (SGIS Songshan), a subsidiary of Guangdong-based steel producer Shaoguan Iron and Steel Co., Ltd (SGIS), has announced that it plans to acquire a 100 percent stake in Baosteel Special Steel Shaoguan Co., Ltd (Baosteel Special Steel Shaoguan) in exchange for its 49 percent stake in Baosteel Special Steel Long Products Co.,Ltd (Baosteel Special Steel Long Products). The latter company at present holds 100 percent of shares in Baosteel Special Steel Shaoguan. Accordingly, the 100 percent of shares in Baosteel Special Steel Shaoguan is valued at RMB 1.334 billion ($0.2121 billion), while the 49 percent stake in Baosteel Special Steel Long Products is valued at RMB 1.401 billion ($0.2227 billion), which will result in a net income of RMB 67.0 million ($10.65 million). The parent company of both Baosteel Special Steel Long Products and SGIS Songshan is Baowu Group.
SGIS Songshan stated that, after the acquisition of Baosteel Special Steel Shaoguan, the competitiveness of SGIS Songshan will improve as the product quality, market recognition and profitability of Baosteel Special Steel Shaoguan have improved significantly over the past two years.