Chinese steel giant Baoshan Iron & Steel (Baosteel) has acquired the entire stake in a joint venture automotive steel production plant it established with Japan's Nippon Steel in 2004.
The joint venture agreement was set to expire on July 30, but Baosteel opted not to extend the partnership with Nippon Steel, preemptively acquiring Nippon Steel's 50% stake for $242 million. Initially, Baosteel held a 50% stake in the joint venture, Nippon Steel owned 38%, and Arcelor, a Western European subsidiary of ArcelorMittal, held 12%. Nippon Steel subsequently acquired Arcelor's share, securing a 50% stake.
The two companies had collaborated to produce automotive steel in response to the rapidly growing Chinese automotive market, supplying Japanese automakers operating in China. However, with the automotive industry swiftly transitioning to electric vehicles, Japanese car manufacturers have faced sales challenges, leading Nippon Steel to decide to exit the joint venture.
Despite the seemingly smooth separation, the split between the two companies appears to have underlying tensions. Recently, the Nikkei reported that Nippon Steel is planning to sue Baosteel for patent infringement.
Tags
STEEL
