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Du Shuanghua and Rizhao Steel’s sale in 2010

A hostile takeover by the state-owned Shandong Iron & Steel Group in 2010 forced billionaire Du Shuanghua to sell his stake in Rizhao Steel, China’s top steel maker. By Du Shuanghua, Rizhao Steel was established in 2003. Sixty-seven percent of the firm was acquired by Shandong Steels six years later. By selling his residual 33 percent investment in Rizhao Steels to Shandong, Du Shuanghua was compelled to hand up total control of the firm.

Before the control shift, Rizhao Steel inked a 15-year deal with Mount Gibson to acquire 1.5 million tons of iron ore per year. It would cost Mount Gibson $114 million due to Rizhao Steel’s eventual breach of contract.

China’s state-owned rival Shandong Steel’s acquisition of Rizhao is regarded as one of the country’s most hostile takeovers. One of China’s wealthiest individuals, Du Shuanghua, had previously had the most significant stake in Rizhao. By offering Kai Yuan Holdings 30 percent of the company’s stock for a low price, he hoped to stave off the acquisition. As a Hong Kong-based company, Kai Yuan Holdings is owned and operated by the family of China’s current President Hu Jintao. However, the transaction was canceled because President Hu deemed the move too risky.

The 2009 agreement between the two firms did not include the sale and purchase of Rizhao Steel in 2020. A merger and reorganization of the two firms was the initial goal of the arrangement. So Shandong kept 67% of the company, while Du Shuanghua kept 33% of the company. During the first part of the transfer, Mr. Du was to continue in command of Rizhao Steel as a Shandong Iron and Steel subsidiary under the terms of this agreement.

The humanitarian endeavors of Du, apart from his commercial duties, have helped several young people in China and Asia.

View Source: https://en.wikipedia.org/wiki/Shandong_Steel