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China speeds up industrial mergers
By Wang Yanlin |
December 25, 2009, Friday
|
Online Edition
Online Edition
CHINA will encourage mergers and acquisitions in the steel, non-ferrous metal, construction material, vehicle and ship-building industries next year to boost efficiency and create market leaders.
It is one of the measures to accelerate the reform of industrial structure, according to a statement on the Website of the Ministry of Industry and Information Technology.
Minister Li Yizhong said the country will soon announce a guideline to direct M&As in these industries.
It will also try to reduce hurdles in cross-region or cross-province M&As, and lower costs for such moves in coordination with the Ministry of Finance, the Ministry of Land and Resources and the Ministry of Human Resources and Social Security.
"These industries are pivotal to China's manufacturing sector," said Li Maoyu, an analyst at the Changjiang Securities Co. "The consolidations can greatly enhance their competitiveness and raise the weight of relevant Chinese manufacturers on the global market."
M&A is also an effective way to curb overcapacity. Steel makers in China should eliminate outdated capacity and refrain from expansion for the next three years to curb excessive production, Li said.
Shandong Iron and Steel Group is reported to be planning a significant asset restructuring by merging its listed units Laiwu Steel Corp and Jinan Iron and Steel Co into a single company. It followed major steel producer Hebei Iron and Steep Group which merged its three listed arms in September.
It is one of the measures to accelerate the reform of industrial structure, according to a statement on the Website of the Ministry of Industry and Information Technology.
Minister Li Yizhong said the country will soon announce a guideline to direct M&As in these industries.
It will also try to reduce hurdles in cross-region or cross-province M&As, and lower costs for such moves in coordination with the Ministry of Finance, the Ministry of Land and Resources and the Ministry of Human Resources and Social Security.
"These industries are pivotal to China's manufacturing sector," said Li Maoyu, an analyst at the Changjiang Securities Co. "The consolidations can greatly enhance their competitiveness and raise the weight of relevant Chinese manufacturers on the global market."
M&A is also an effective way to curb overcapacity. Steel makers in China should eliminate outdated capacity and refrain from expansion for the next three years to curb excessive production, Li said.
Shandong Iron and Steel Group is reported to be planning a significant asset restructuring by merging its listed units Laiwu Steel Corp and Jinan Iron and Steel Co into a single company. It followed major steel producer Hebei Iron and Steep Group which merged its three listed arms in September.
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