Beijing - Chinese group Baosteel Steel and Wuhan Iron and Steel, two of the largest steel producers in the country, planning a joint restructuring, the companies said on Sunday, without specifying what it is to review the activities.
Baosteel is the second largest steel company in China and Wuhan is the fourth largest in the country.
The Beijing government has said mergers will be key in the consolidation of the steel industry to reduce excess capacity and increase the proportion of production of the ten largest companies in China.
China has pledged to reduce excess capacity in major industrial sectors and reported in February that will end 100 million to 150 million of steel production capacity and 500 million tons of coal production in the next three to five years.
On Sunday, the head of the government's main planning agency said Beijing wants to cut 45 million tons of steel capacity and 280 million tons of coal this year.
According to a statement from Baosteel and Wuhan restructuring of the details have not been finalized and so are the agreement between the companies will still need regulatory approval.
The companies also said they asked the regulators of stock markets from China to suspend business with his actions on Monday and will issue a new statement after five sessions.
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