The decision that Bao Steel & WISCO will merge into one was announced on June 26th. The combined steel-making capacity will be more than 80Mtpa after the merger, making the “Big Mac” potentially the second largest steel maker worldwide. However, the enigmatic effect of the combination is still a hot debate for insiders. In China, no success story has happened yet after mills' merger. For example, Anshan & Benxi have been trying to merge since 2006 but there’s no exact synergy so far due to conflict over controlling between owners. Though Shandong Steel Group, Laiwu and Jinan Steel joined together, their financial loss has proven to be growing year by year ever since the merger.
It’s said Baosteel & Wisco will take over 60% market share of auto steel and more than 50% that of silicon steel after the combination, reinforcing their own leverage in China’s local market. When the synergy will brew and work between the two giants is to be expected in the industry.