Hangzhou Hangyang Co. Ltd (Hangyang) is reportedly keen to expand the scope and market share of its business in China, with the pursuit of a majority stake in Baosteel Gases.

Established in 2010 and with a registered capital that now stands at RMB 1.18bn ($174m), Baosteel Gases is a wholly state-owned-enterprise directly under Baosteel Metal Co. Ltd, a subsidiary of China’s Baowu Steel Group, which was itself formed from the merger of Baoshan Steel (Baosteel) and Wuhan Iron and Steel in December 2016.

Baosteel Gases has business in air gases from cryogenic air separation plants (ASUs), synthetic gases, hydrogen, clean energy gases, and packaged gases. At present, it has more than 1,000 employees and 30 branch companies and subsidiaries.

Though the industrial gases business has proven to be both profitable and promising for the company, Baowu Steel Group now wants to keep the focus on its core business and Baosteel Gases expressed in January (2018) that it wanted to sell 51% of the shares of its gas business through the Shanghai United Assets and Equity Exchange on a competitive bid basis.

Baosteel Gases has set the lowest acceptable bid at RMB 1.9bn.

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Hangyang has confirmed this summer that it will form a consortium to bid for this package.

Hangyang is the largest ASU manufacturer in China and also one of the major domestic industrial gas players, with its industrial gas business generating revenues of RMB 3.9bn ($622m) in 2017. The company has endured mixed financial results in recent years, however, and has arguably been at the mercy of headwinds in the plant and equipment side of the business. The sale of gases is generally a more stable business.

Hangyang announced after its board meeting on 13th July that it will form a consortium with Hangzhou Industry Investment Co. Ltd to bid for the stake in Baosteel Gases.

Hangyang stated in its announcement that if successful in the bidding, it will be beneficial to expand the size of its industrial gas business and increase its market share significantly, as well as synergistic in bringing together operations in gas and equipment manufacture.