Known as Baowu Group, the steel giant on Wednesday signed agreement to get 40% stake in Chongqing Iron & Steel's controlling shareholder - worth 1.6 billion yuan of its registered capital, the Chongqing firm said in a filing to the Shanghai Stock Exchange.
Baowu will replace Four Rivers Investment as the owner of Chongqing Iron & Steel, with 2.1 billion shares, or 23.51% stake indirectly held in the southwestern steelmaker, according to the filing.
The statement did not mention value of the transaction, but said that related taxes occurred will be bore by the buyer.
Baowu Group had made two important purchases of China's Taiyuan Iron & Steel and Maanshan Iron & Steel in 2019 and 2020, in response to industry regulator's appeal to further consolidate the country's mammoth steel sector.
Chongqing Iron & Steel, with 6.7 million tonnes of steel output in 2019, could help fuel Baowu's goal of achieving over 100 million tonnes of the industrial metal per year.
The deal is still pending certain conditions including China's anti-monopoly regulator's approval, according to the filing.
Chongqing Iron & Steel's share closed at 1.54 yuan ($0.2279) per share on Wednesday.
($1 = 6.7579 Chinese yuan renminbi)
(Reporting by Min Zhang in Beijing and Emily Chow in Shanghai, editing by Louise Heavens)