China's Shandong Steel takes 67 pct stake in Rizhao
SHANGHAI, Sept 7 (Reuters) - China's state-owned Shandong Iron and Steel Group, the world's eighth-largest steel maker, signed an agreement with Rizhao Iron and Steel on Sunday to take a 67 percent stake in the country's leading non-state steel firm, the China Securities Journal said on Monday.
Shandong would pay cash for the 67 percent stake, while Rizhao's former shareholders would retain a 33 percent stake in the mill, the newspaper said. Rizhao is founded and controlled by billionaire Du Shuanghua.
Shandong Steel was formed by the merger of the state-owned parent companies of Laiwu Steel Corp (600102.SS) and Jinan Iron and Steel Co (600022.SS). The companies are all located in the eastern province of Shandong.
The consolidation is part of a plan by the Shandong provincial government to streamline its steel sector, one of the country's largest and most fragmented.
Rizhao and Shandong Iron and Steel signed a letter of intent for consolidation in early November but the deal was abandoned in January after Kai Yuan Holdings Ltd (1215.HK), a property investment and heat energy supply company, bought about 30 percent of the core assets in Rizhao. (Reporting by Alfred Cang and Jacqueline Wong)
