Baosteel set to take control of Aquila

Baosteel Group Corp, the owner of China's biggest publicly traded steelmaker, will take control of Australia's Aquila Resources Ltd in a $1.3 billion deal that was announced on Thursday. CHINA DAILY

Baosteel Group Corp, the owner of China's biggest publicly traded steelmaker, will take control of Australia's Aquila Resources Ltd after the third-largest shareholder accepted its bid.

Baosteel and partner Aurizon Holdings Ltd "entered into an agreement with Aquila to facilitate the orderly transition of control and management", the bidders said in a statement on Thursday. Baosteel's A$3.40 per-share cash offer values Aquila at about A$1.4 billion ($1.3 billion).

The deal will give Baosteel a share of the A$7.4 billion West Pilbara iron ore mine, port and rail project in Western Australia. It is seeking to accelerate development to meet steel demand in China, the world's biggest market.

Mineral Resources Ltd, which holds 13 percent of Aquila and had made a rival takeover offer, agreed to accept the bid on Thursday. Tony Poli, Aquila's co-founder and largest shareholder with a 29 percent stake, has also accepted the proposal, the bidders said in the statement. Baosteel holds 9 percent of Aquila, according to data compiled by Bloomberg.

Three members of Aquila's board agreed to resign in favor of three Baosteel appointees. Together with the appointment of another director, the bidders will have control of four of the seven board seats.

Aquila will waive all remaining conditions and has recommended shareholders accept Baosteel's offer, the bidders said. The offer period will be extended to July 25.