Chinese steelmaker Baoshan Iron & Steel Company has agreed to acquire Nippon Steel Corporation’s 50% stake in their Shanghai-based automotive steel joint venture Baosteel-Nippon Steel Automotive Steel Sheets.
The joint venture was established in 2004 to combine Nippon Steel’s advanced steelmaking technology with the huge growth opportunities in China’s automotive industry at that time.
The company produces cold rolled and hot dip galvanised steel sheets mainly for Japanese automakers based in China.
Nippon Steel said its management period of the joint venture was scheduled to expire at the end of August 2024 and it had agreed to withdraw from the partnership on this date, subject to receipt of regulatory approvals and other closing conditions.
Baoshan had agreed to pay Nippon Steel US$242m to take full control of the company.
Demand for automotive steel had slowed in China in recent years as vehicle manufacturers shifted production to lighter electric vehicles (EVs). Japanese automakers based in China had also struggled recently with strong competition from Chinese.
Nippon Steel was pursuing growth opportunities elsewhere, including its proposed US$14.1bn proposed takeover of US Steel which was coming up against significant opposition from local policy makers.
