SHANGHAI, Aug 15 (AP)-- China's second-biggest steelmaker, Anshan Iron and Steel Group, said Monday that it has merged with smaller competitor Benxi Iron and Steel Group, creating a rival for No. 1 steelmaker Baosteel.
The new company, to be called Anben Iron & Steel Group, was established on Friday, Angang New Steel Co. Ltd., Anshan's Hong Kong-listed subsidiary, said in an announcement posted on the Hong Kong Stock Exchange Web site.
Both Anshan and Benxi, China's fifth-largest steelmaker, are state-owned enterprises based in the rust-belt northeastern province of Liaoning.
The merger, which was called "a joint restructuring," is in keeping with China's policy of consolidating its many smaller steelmakers into larger, more competitive industrial groups. But it is taking the form of a cooperation agreement and does not involve the exchange of any equity, the announcement said.
The aim is to build a "giant enterprise group with international competitiveness based on the principles of resources sharing, complementary advantage (and) mutual benefits," it said.
According to state media reports, Anben Iron & Steel will have an annual steelmaking capacity of more than 20 million tons, compared with the 21.4 million tons of steel produced in 2004 by Shanghai-based Baoshan Iron & Steel Group, also known as Baosteel.
Plans for the tie-up were announced in March.
China, the world's biggest steel producer, consumes about a third of global steel output. Output is expected to top 300 million tons this year.