CHINA Baowu Steel Group, the world’s second-largest steel firm, will acquire a majority stake in rival Magang Group Holding Co. as China pushes for consolidation in its steel industry.

In a statement posted on the website of the Shanghai Stock Exchange on Sunday, Magang’s listed entity, Maanshan Iron & Steel Co., said the deal signed May 31 would give Baowu a 51 percent stake in Magang.

Baowu will also hold 45.54 percent of the shares of Maanshan Iron & Steel, making it the listed company’s controlling shareholder, according to the statement.

The value of the deal was not disclosed. Reuters previously reported that Baowu was in talks to take over Magang.

Baowu ranked as the world’s second-largest crude steel producer in 2017, with 65.39 million tons of output, the latest data from the World Steel Association showed. Maanshan Steel ranked 16th, with 19.71 million tons of output.

Top-ranked ArcelorMittal produced 97.03 million tons in 2017.

The Baowu acquisition is an “important measure to accelerate the merger and reorganization of overcapacity industries,” Maanshan said in the statement.

China has said it wants to put 60 percent of its national steel capacity in the hands of its top 10 producers by 2020 to boost efficiency. Apart from consolidating the sector, China has shut small, polluting and inefficient mills to address a years-long steel glut.

The deal is subject to regulatory approval and must pass an anti-monopoly review.

(SD-Agencies)