Baowu Steel Group to acquire controlling stake in Magang

China Baowu Steel Group, the world's second largest steel-maker, is going to obtain a 51 percent stake in the listed entity of Maanshan Iron and Steel Co Ltd, or Magang, in a step that would bring Baowu closer to becoming a steel giant with 100 million metric tons of annual output, analysts said.

Shanghai-listed Magang said in an announcement published on Sunday that its controller, Anhui Provincial State-owned Assets Supervision and Administration Commission, agreed last Friday to transfer the 51 percent stake in Magang to China Baowu for free so it can develop on a larger platform and avoid a steel glut.

The restructuring of the two steel-makers will benefit their future development as well as the Chinese steel industry as whole, said analysts.