General Steel Holdings Inc. to Acquire Yantai Steel Pipe Co. Ltd.

General Steel Holdings Inc., one of China’s non-state owned steel products producers, has announced it has signed a letter of intent to acquire 80 percent of Yantai Steel Pipe Co. Ltd. of Laiwu Iron & Steel Group.

Upon completion of the proposed acquisition, Yantai Steel Pipe will become a Chinese-foreign joint venture, for which General Steel will have 80 percent ownership interest and Laiwu Iron & Steel Group will have 20 percent ownership interest, according to the press release.

The joint venture will preserve the existing production systems of Yantai Steel Pipe and build a new production line for hot rolling seamless pipe. The production capacity of the joint venture is designed to be 500,000 to 600,000 tons annually. The main products of the joint venture include oil pipe (tube), boiler pipe (tube), hydraulic pipe (tube) and those used in mechanical structures.

“We are very excited to have signed a letter of intent with Yantai Steel Pipe, a company with a 50 year operating history, an established brand name and a well developed distribution network,” says Henry Yu, CEO and chairman of General Steel Holdings Inc. He adds, “This is an especially attractive opportunity for us, as Yantai Steel Pipe, and its subsidiary, Yantai Lubao Steel Pipe Co. Ltd, will enable us to generate higher margin revenues through its seamless steel pipe products.”

Wei Xu, president of Yantai Steel Pipe states, “The steel industry in China is undergoing rapid change and consolidation. The ability to forge a strong working relationship with a forward-looking company like General Steel gives us a great deal of confidence. We are very happy to have signed this letter of intent with General Steel and look forward to a promising future.”