Fangda Iron and Steel acquires Anyang Iron and Steel Co., Ltd. "Zhuanlu Zhongyuan" Iron and Steel Industry M & A speed up again

Since the beginning of this year, the pace of merger and reorganization of iron and steel enterprises has obviously accelerated, among which Fangda Iron and Steel Group has participated in the mixed reform of Anyang Iron and Steel Group. As the most important iron and steel enterprise in the Central Plains, Anyang Iron and Steel Group has a production capacity of more than 10 million tons and has a number of high-end product lines, which has previously attracted a number of private steel companies to compete. At present, the stake of Anyang Iron and Steel Group has entered the auction stage. Only Fangda Iron and Steel Group signed up. Industry insiders said that Fangda Iron and Steel Group's acquisition of Angang Group is another layout after the acquisition of Dazhou Iron and Steel, which is conducive to improving the group's product structure and regional market layout. The production capacity of the rear large iron and steel group may exceed 30 million tons after the completion of the M & A. to become the seventh largest iron and steel group in China.

A group of heroes competed for Zhongyuan Angang to reform Hualuofang Group.

As the largest iron and steel enterprise in Henan Province, Anyang Iron and Steel Group has an annual steel production capacity of more than 10 million tons. According to public data, Anyang Iron and Steel Group has total assets of 56.32 billion yuan, net assets of more than 15 billion yuan, operating income of 76.3 billion yuan and net profit of 2.13 billion yuan in 2021.

If such a high-quality state-owned enterprise wants to carry out mixed reform, it is naturally "a hundred good women". While transferring the controlling stake of Anyang Iron and Steel Group, Henan Province requires the acquirer to continue to invest in Angang and the iron and steel industry of Henan Province in the future after acquiring the equity of Angang Group. The total amount of equity transfer price and later investment may exceed 90 billion yuan, which puts forward high requirements for the financial strength of the participants in the mixed reform.

Henan Province has imposed restrictions on the conditions of the transferee, requiring the transferee to be a large group enterprise with a crude steel output of more than 10 million tons in 2021, with total assets and revenue of not less than 50 billion yuan. There are about 10 private iron and steel groups that meet the above conditions.

Prior to this, Fangda Group, Shagang Group, Delong Group and other three private iron and steel giants have launched a "Central Plains competition" against Anyang Iron and Steel Group. Among them, as Shagang Group intervened earlier, and the bilateral cooperation intention was also signed, market participants once thought that Angang Group or its "things in the bag." But in November last year, Shagang Group announced that the company had been placed on file for investigation by the CSRC on suspicion of illegal information disclosure. This may have a certain impact on the refinancing and acquisition of Shagang Group. This time, the equity transfer of Angang Group was listed on the last day, and Shagang Group still did not sign up.

And Fangda Special Steel (600507.SH) also transferred to the parent company Jiangxi large Iron and Steel Group to participate in the equity auction of Anyang Iron and Steel Group because the company does not meet the qualifications of the transferee of Anyang Iron and Steel Group.

In addition to the increase in production capacity, market participants believe that the acquisition of Anyang Iron and Steel Group's products and business systems also complement each other. At present, Fangda Iron and Steel Group has four major iron and steel enterprises: Fangda Special Steel, Pingan Iron and Steel, Jiujiang Steel and Dazhou Iron and Steel. Wang Guoqing said: "of the four subsidiaries of Fangda Iron and Steel Group, three are in Jiangxi, while Dazhou Iron and Steel is in Sichuan. From the regional layout of the market, it is more concentrated in East China and Southwest China." For the Central Plains, the radiation is relatively limited, if we can successfully complete the mixed reform of Anyang Iron and Steel Group, we can achieve the integration of the above-mentioned regional market. "

At the same time, Wang Guoqing added: "from the perspective of product structure, Anyang Steel has medium and heavy plate, cold rolling, hot rolling, high-speed wire rod, shaped bar and ductile cast pipe, while Fangda Iron and Steel Group has only medium and heavy plate, lack of hot rolling and cold rolling. After realizing the mixed reform and integration, Fangda Iron and Steel Group's product chain can also be improved, while the downstream market can also radiate aerospace transportation, equipment manufacturing, shipping and other fields."

Policies frequently go out of the iron and steel industry integration and enter the acceleration period

As China's iron and steel industry has entered a stage of transformation from scale benefit to quality benefit, the development goal of China's iron and steel industry has been to eliminate excess capacity, implement merger and reorganization, implement green development, promote intelligent manufacturing, and improve variety and quality. enhance international competitiveness.

Since the beginning of 2021, the Ministry of Industry and Information Technology has issued the guidance on promoting the High-quality Development of the Iron and Steel Industry (draft for soliciting opinions), proposing that a number of super-large iron and steel enterprise groups will be built in the future, with the concentration of the top 10 iron and steel enterprises reaching 60%. Since then, the "14th five-year Plan for the Development of the Raw material Industry" also proposed to encourage leading enterprises to implement mergers and restructuring to create a number of world-class super-large iron and steel enterprise groups. This year, the Ministry of Industry and Information Technology has successively issued the "guidance on promoting the High-quality Development of the Iron and Steel Industry" and the "carbon Dafeng implementation Plan of the Iron and Steel Industry" to further promote the merger and reorganization of the industry.

A person in the steel industry in Tangshan said: "now that the iron and steel industry is carrying out capacity removal and capacity replacement, large steel enterprises are actively carrying out mergers and acquisitions to increase capacity in order to cope with future technological transformation, upgrading, capacity replacement and capacity cuts. mergers and restructuring of the industry is also conducive to policy supervision and management of the industry."

Under the policy encouragement and the development trend of the industry, mergers and acquisitions in the iron and steel industry have accelerated again this year. In addition to the mixed reform of Angang Group, Shougang shares also announced at the beginning of the year that it would issue shares by way of shares. Buy the 49% stake held by the controlling shareholder in Shougang Steel Trade Investment Management Co., Ltd., the transaction price is more than 5.8 billion yuan. Baowu Iron and Steel's merger and acquisition of Shanxi Iron and Steel is also accelerating. Last week, Fujian Fuhua and Tongkang enterprises also carried out independent merger and reorganization, cooperation in the implementation of short-process electric arc furnace steelmaking project.

After the completion of the mixed reform of Anyang Iron and Steel Group, Fangda Iron and Steel Group will also integrate and reorganize the iron and steel enterprises in Henan Province. Wang Guoqing said: "this mixed reform is not like the share transfer between state-owned enterprises before, but needs to invest real money and silver to promote the development of the local steel industry through capital investment." The output of crude steel in Henan is about 33 million tons in 2021, of which the total output of large and medium-sized steel enterprises is about 22 million tons. In addition to Anyang Iron and Steel Group, Henan Fengbao Special Steel, Henan Jiyuan Iron and Steel, and so on. " In the future, Fangda Iron and Steel Group may continue to promote mergers and acquisitions of local iron and steel enterprises on the basis of Angang Group.

It is worth mentioning that the policy not only encourages mergers and restructuring between the iron and steel industry to create large iron and steel enterprise groups, but also encourages independent hot rolling and independent coking enterprises to participate in the merger and reorganization of iron and steel enterprises. Such as listed companies, Bayi Iron and Steel (600581.SH), three Steel Minguang (002110.SZ) have issued asset restructuring announcements, the restructuring is the major shareholders of ironmaking, processing, coking energy and other related assets.