China Baowu Steel to take control of stainless steel maker TISCO

BEIJING (Reuters) -- China Baowu Steel Group, the country's top steelmaker by output, has agreed to take a controlling stake in stainless steel giant Taiyuan Iron & Steel (Group) Co Ltd, also known as TISCO, in a further consolidation of the country's mammoth steel sector.

Baowu Group reached agreement with Shanxi State-owned Capital Operation Co Ltd on Friday to take a 51% stake in TISCO, according to a filing on the Shenzhen Stock Exchange by Shanxi Taigang Stainless Steel, a TISCO subsidiary.

The 51% stake is worth 14.5 billion yuan ($2.10 billion), based on an audit of TISCO's net assets, although Baowu will not pay anything for it, said the filing, in what is a state-backed restructuring.

China, the world's biggest steel producing country, has been calling for consolidation in the industry in an effort to achieve orderly market competition and reduce emissions.