Delong Holdings, the manufacturer of hot-rolled steel coils in China, says it has agreed to acquire an 80% equity interest in Laiyuan County Aoyu Steel Co. for RMB 264 million ($53.6 million).
Based in Hebei province, Aoyu Steel has an annual production capacity of 1.2 million tonnes. The company manufactures and sells pig iron, steel billets and trades steel materials. Aoyu Steel also owns 51% equity in Laiyun County Butai Mining Co, a company which is engaged in the production and sale of limestone.
The proposed acquisition of Aoyu Steel will raise Delong’s annual steel production capacity increase by 46.2% or 1.2 million tonnes to 3.8 million tonnes.
In addition, based on the terms of the deal, Delong will, within three years from the completion of the proposed acquisition, acquire the remaining 20% equity in Aoyu Steel.
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