Are we a potential acquisition target?WORLD'S LARGEST STEELMAKER...

Are we a potential acquisition target?

WORLD'S LARGEST STEELMAKER PLANS IPO FOR WATER UNIT

From Infranews 22 April 2021

The water treatment offshoot of China Baowu Group - the world's largest steelmaker by capacity - is looking to launch an initial public offering (IPO) in the next three years.“As the water treatment industry is a capital-intensive sector, we feel the need to tap the markets through a listing to fuel our expansion,” a spokesperson of Baowu Water told Inframation, adding that the company is also open to equity partnership opportunities on the project- or corporate-level.

Baowu Water will consider both greenfield investments and brownfield acquisitions of companies and projects to expand its scale prior to the planned listing in mainland China. The spokesperson did not reveal how much the company intends to raise through the IPO. In terms of brownfield purchases, Baowu Water will target domestic and international firms that possess cutting-edge wastewater treatment technologies that it currently lacks, or water treatment plants in central Chinese provinces such as Anhui. “For instance, we are seeking to buy companies that own advanced membrane water treatment technologies,” she said, without elaborating on how much the firm is looking to invest in acquisitions.

The company’s focus areas include industrial water treatment, especially the management of wastewater produced from steelmaking plants and other industrial facilities. It is also expanding its presence in water recycling, water pollution control as well as municipal water treatment, the spokesperson said. Instead of providing pure engineering, procurement and construction (EPC) services to industrial clients, Baowu Water is keen to invest, design and develop projects. It is primarily interested in build-own-operate projects, she said. “We are also open to project opportunities outside China, especially in countries that are close to home,” the spokesperson said. “Southeast Asian countries such as Indonesia and Vietnam are among our target overseas markets.”

Launched in 2019, Baowu Water’s industrial water treatment projects are located across central, southwest and eastern China, including Yunnan province and Chongqing municipality. State-owned China Baowu Group's assets were valued at over CNY 820bn (USD 127bn) at the end of 2020. The company owns Baosteel Group in Shanghai, Wuhan Steel Group in central Hubei province, Maanshan Iron & Steel Group in central Anhui and Chongqing Iron & Steel in southwest Chongqing city.