Nippon Steel to dissolve JV with China's Baoshan after 20 years
Recasts with Nippon Steel's confirmation in paragraphs 1, 2 and 6-7; Baoshan's statement in paragraph 2; updates throughout
By Katya Golubkova and Amy Lv
TOKYO, July 23 (Reuters) -Nippon Steel 5401.T will dissolve its joint venture with China's Baoshan Iron & Steel 600019.SS, it said on Tuesday, ending two decades of cooperation when their existing shareholders' agreement expires at the end of August.
Nippon Steel will transfer its 50% stake in the joint venture to Baoshan, it said. In a separate statement Baoshan said it had agreed to pay about 1.8 billion yuan ($247 million) for the holding.
The joint venture was producing and selling cold-rolled steel sheets and hot-dip galvanized steel sheets for automotive use in China. Nippon Steel did not provide a reason for dissolving the partnership originally established in 2004.
The Nikkei business daily, which first reported the news, said the company had decided to shift its attention to the U.S. and India.
The company's production capacity in China will be cut by 70%, but it will still keep around 1 million metric tonnes per year thanks to its joint business with Wuhan Iron and Steel, another unit of the China Baowu Steel Group, Nikkei said.
Nippon Steel said in a statement to Reuters the decision was not linked to its bid for U.S. Steel X.N, which has led to some U.S. scrutiny of the Japanese company's assets in China.
"Consultations on this matter have been held since September 2022," Nippon Steel said. The company announced the deal to buy U.S. Steel in December 2023.
Nippon Steel said last week it had hired former U.S. Secretary of State Mike Pompeo to help with its effort to close the U.S. Steel acquisition. Pompeo is visiting Japan this week, according to local media reports.
In the statement to Reuters, Nippon Steel said Pompeo had no connection to its decision on its China operations. It declined to comment on details of his trip to Japan.
($1 = 7.2741 Chinese yuan renminbi)
Reporting by Katya Golubkova in Tokyo and Amy Lv in Beijing, additional reporting by Satoshi Sugiyama in Tokyo; Editing by Jamie Freed, Varun H K, Miral Fahmy and Jan Harvey
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.