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Shougang Steel River and the Propaganda Department to respond to the merger rumors

August 3 morning, the Shougang Group and the River Steel Group to merge, forming the largest of Severstal Group message, Shougang Group and the River Steel Group Propaganda Department were responsible for the Economic Observer newspaper had to respond, and both sides expressed "propaganda section have not received the exact message from superiors. "
Fit together, it is not to say
Shougang recent clamor for a day on the river steel news of the merger, the Economic Observer reported today call the company both the Propaganda Department, received the news: Shougang, Hegang publicity department has not yet got the exact message you want to merge.
Shougang Group Propaganda Department official told the Economic Observer newspaper: "Specific cases we do not know, we are also concerned about the related news media widely reported in the present it is not possible to reply on whether to merge.." For the future both in the short term whether the existence of the possibility of merging, Shougang Group propaganda Department official said "good answer", Hegang propaganda Department responsible person is not given a positive answer.
August 1, "Bloomberg quoted informed sources" said that China plans to merge Baosteel and Wuhan Iron and China Galvalume Steel Sheet Group outside the Shougang Group and plans to merge the River Steel Group, created Severstal Group, formed after the merger of Baosteel Wuhan Iron and Steel Group South north and south side by side trend. The news came out, they spread rapidly in the industry open.
August 1 afternoon, Shougang Group, a subsidiary mining mining company employee told the Economic Observer newspaper: "Shougang internal staff already talking about this a few years ago, he said the Shougang Steel Group plans to move to Hebei, from the current. situation, is clearly more favorable than a few years before the merger. "
Brokerage analysts: Merge difficult coordination at the operational level
The merger rumors, spread rapidly not only in the media, but also quickly led to the securities industry's attention. Everbright Securities analysis: "Shougang steel river and do not have the conditions for the merger of merger and reorganization of the steel industry has been, almost without success, of which the most important reason is that the personnel arrangements."
Analysis of Everbright Securities believes that the ongoing consolidation Wu Bao conditions in this area is relatively good. Hebei Iron and Steel and Shougang contrast, conditions in terms of personnel, much less Baosteel and Wuhan Iron and Steel. Hebei Iron and Steel Group is the original Tangshan Iron and Steel, Handan Iron and Steel, Chengde Steel, Xuanhua Steel merged in 2008, there is no completely straightened out.
From the volume point of view, 2015 annual steel output 47.74 million tons, Shougang Group 2015 annual steel output 28.55 million tons, River Steel Group's steel production is much larger than Shougang, Shougang's steel assets most are also in Hebei Province. If the merger, then, by the River leading steel when it seems more smoothly, from the perspective of local government and enterprise resources more smoothly. On the other hand, Shougang's total assets will be better than the Hebei Iron and Steel (Shougang Group, the asset value of land in Beijing's 4000-6000 billion), Shougang's steel assets with respect to the River Steel Group is also biased high. Therefore, the Shougang steel and rivers merge, it is difficult to separate who can be in a dominant situation. The two sides belong to Beijing SASAC, if forced matchmaker can only be a dubious case, is not particularly meaningful.
However, analysts also pointed out that, from 3--5 years perspective, Shougang Group, Hebei Iron and Steel Group, Shandong Iron and Steel Group and even consolidation will be the trend, this aspect needs to do more groundwork in terms of personnel, and the need to merge Wu Po after obtaining a good demonstration of benefits.

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