Laiwu Steel blocks plan for merger
By David Stanway |
January 5, 2011, Wednesday
|
Print Edition
Print Edition
THE shareholders of China's Laiwu Steel have rejected a plan to merge with Jinan Iron and Steel, a joint statement issued by the two companies said yesterday.
The merger, estimated to be worth about 11.3 billion yuan (US$1.7 billion), required the consent of two-thirds of the members of both companies' boards, but while Jinan Steel approved the proposal, Laiwu did not, the statement said.
The proposal was first put forward early last year, but both companies said in August that "changes in the macro-economic environment" as well as difficulties in the steel sector itself had forced plans to be delayed.
The two companies, based in Shandong Province, already form part of the Shandong Iron and Steel Group, one of several new regional entities created to drive China's industry consolidation plans forward.
Total output of the group stood at 21.3 million tons in 2009, making it China's sixth-biggest steel producer.
China plans to put 60 percent of total output under the control of its top 10 mills by the end of 2015.
The merger, estimated to be worth about 11.3 billion yuan (US$1.7 billion), required the consent of two-thirds of the members of both companies' boards, but while Jinan Steel approved the proposal, Laiwu did not, the statement said.
The proposal was first put forward early last year, but both companies said in August that "changes in the macro-economic environment" as well as difficulties in the steel sector itself had forced plans to be delayed.
The two companies, based in Shandong Province, already form part of the Shandong Iron and Steel Group, one of several new regional entities created to drive China's industry consolidation plans forward.
Total output of the group stood at 21.3 million tons in 2009, making it China's sixth-biggest steel producer.
China plans to put 60 percent of total output under the control of its top 10 mills by the end of 2015.
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