Observers said this step is a new step in China's accelerated consolidation drive in the iron and steel industry, as part of efforts to promote high-quality development of the industry and optimize the pricing mechanism.
The deal will increase the global competitiveness of Baowu Steel Group, already the world's largest steel producer, across the industrial chain, particularly in overseas mineral resources.
Shares of Bao Steel, a unit of Baowu Steel, trading in Shanghai rose 0.53 percent to 5.69 yuan ($0.82) on Wednesday before the deal was announced. Shares of Sinosteel NMC, traded in Shenzhen, a subsidiary of Sinosteel, fell 1.73% to 10.20 yuan.
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