Recently, Shanxi state-owned capital Operation Co. , Ltd. and China Baowu Iron and Steel Group Co. , Ltd. ("China Baowu" for short) signed an agreement on the transfer of shares in Taiyuan Iron and Steel (Group) Co. , Ltd. ("Taigang Group" for short) , push forward the joint reorganization of Tisco Group and China Baowu. This is another major restructuring move by China Baowu, following the restructuring of Ma Steel and its effective control of Chongqing Iron and steel. It is a step closer to the realization of the "billion tons of Baowu" strategy and the vision of a "global leader in the steel industry" . This has also aroused the attention of various parties to speed up the merger and reorganization of China's steel industry and reverse the low concentration of the industry. According to the announcement issued by the listed company, Tisco, according to the agreement on the free transfer of the shares of Taiyuan Iron and Steel (Group) Co. , Ltd. , China Baowu Iron and Steel Group Co. , Ltd. , signed on August 21, shanxi state-owned Capital Operation Co. , Ltd. will transfer its 51% stake in tisco to China Baowu without compensation. Upon completion of the transfer, China Baowu will become the controlling shareholder of tisco group, and the state-owned capital Operation Company of Shanxi Province will reduce its stake from 100 per cent to 49 per cent. According to public information, China Baowu is a pilot enterprise of state-owned capital Investment Corporation, which was established on December 1,2016 through a joint reorganization of the former Baosteel Group Corporation and Wuhan Iron & Steel (Group) Corporation. In 2019, China's Baowu continued to maintain its leading position in the industry, achieving steel output of 95.46 million tons, total revenue of 552.2 billion yuan and total profit of 34.53 billion yuan, ranking 111th in the Fortune 500 world. TISCO group is a super-large iron and steel joint enterprise integrating iron mining with iron and steel production, processing, distribution and trade. It is also the world leader in the stainless steel industry, with an annual production capacity of 12.94 million tons of steel (of which 4.5 million tons are stainless steel) , can produce stainless steel, carbon steel and composite plate three series of products. In 2019, Taigang Group had total assets of 128.47 billion yuan, realized crude steel output of 10.86 million tons, operating income of 79.7 billion yuan and total profit of 3.513 billion yuan. After the implementation of the joint restructuring, China Baowu will accelerate the realization of "billion tons Baowu" strategy and "global steel industry leader" vision. With the support of Shanxi Province and Baowu of China, Tisco group will quickly realize the synergy effect, stimulate the vitality and power of the enterprise, further expand the development space, enhance the comprehensive competitiveness, and consolidate the position of the leading stainless steel enterprise in the world, to achieve higher quality development, and strive to build within 5 years to become China Baowu stainless steel industry integrated operation of the flagship platform, the world's most competitive stainless steel industry chain enterprises. At present, China accounts for more than 50 percent of the world's steel production, with 28 of the world's top 50 steel companies producing steel, according to Li Xinchuang, party secretary of the Metallurgical Industry Planning and Research Institute. The joint reorganization of China Baowu and Tisco group is of great significance for building the world's steel flagship enterprises and leading China from a steel power to a steel power. It is understood that the above-mentioned joint reorganization is also required to report to the State-owned Assets Supervision and Administration Commission for approval, and to carry out relevant regulatory review and other procedures. "from the perspective of the Global M & A cycle, the inherent law of the steel industry and the demand of enterprise development, it is the general trend to push forward the M & A of China's steel enterprises, " Li said, noting that China has a large number of steel enterprises, however, the concentration has been at a low level, which seriously restricts the high-quality development of China's iron and steel industry. At the national level, industrial policy clearly calls for Concentration ratio and the formation of a number of globally competitive world class steel conglomerates. From the industry level, the Iron and steel enterprise quantity is many, the management decentralized market pattern is the price war, homogeneity and so on disorderly competition root. In recent years, the pace of M & A and regional integration of domestic steel enterprises has accelerated. Shanxi supports leading enterprises such as Shanxi Jianlong and Jigang group to speed up the integration of production capacity in the province. Handan wants to consolidate the number of steel mills from 17 to eight by 2020 through mergers and acquisitions. Xuzhou plans to optimise 18 steel mills into two large steel complexes, with a target of reducing steel production capacity by more than 30 per cent by 2020. It is worth noting that the concentration of China's iron and steel industry is still low, and the orderly development of the industry and industrial policy requirements are still a large gap. The China Iron and Steel Association has made "accelerating the merger and reorganization and optimizing the Industrial Organization structure" one of the key tasks to promote the high-quality development of the steel industry. Shen Bin, President of the China Iron and Steel Industry Association, recently stressed that the steel industry should speed up the pace of mergers and reorganizations, build an industrial pattern of division of Labor, Cooperation, effective competition and common development, and focus on improving its ability to cope with market crises in a coordinated manner, we will create advantageous enterprise groups at different levels and foster leading enterprises with global influence, regional appeal and professional influence. We will promote international production capacity cooperation and Global Steel Governance. At present, the speed of merger and reorganization of Iron and steel industry is obvious, but the problems of "scale complex" , "heavy reorganization, light integration" , etc. . "We should promote the merger and reorganization of Iron and steel enterprises with the thinking of 'high quality' , so as to enhance the international competitiveness of China's iron and steel industry. " Li Xinchuang pointed out that the reorganization of iron and steel enterprises should, on the basis of expanding scale, respect the law of the development of the Iron and steel industry, from expanding the scale of simplification to "expanding the scale + improving the quality" , from the general merger and reorganization into "merger and reorganization + integration to enhance" .