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 Du Shuanghua, Rizhao and Shandong Steel merger

In 2010 Shandong Iron and Steel Group bought and acquired Rizhao Iron and Steel in a merger; prior to this Rizhao Iron and Steel had been owned by Du Shuanghua, who was a billionaire and one of the richest men in China. Du Shuanghua was a self-made billionaire who had largely acquired his wealth through his dealings in the steel industry. Yet the acquisition marked a purchase of an independent enterprise by a state-controlled company, prompting speculation of renationalization efforts by the Chinese Communist Government.

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During the 2009-2010 purchase Du Shuanghua attempted to thwart the deal by selling a 30% stake in the company ownership (at low cost) to Kai Yuan Holdings, a Hong Kong-based company run by relatives of the President Hu Jintao. Yet this attempt failed as it was considered too dangerous for the family-own business of Mr. Hu. Yet under the original agreement of the purchase, Shandong Iron and Steel Group would own about 67% in cash of the company’s assets, while Shuanghua would retain 33% ownership of Rizhao, still being the de facto head of the company and continuing to manage it throughout the earliest stage of the acquisition process.

Shandong Steel is owned by the Chinese Province Shandong, and this acquisition was done to further aid the provincial government’s attempt to consolidate and streamline its steel manufacture.

As of 2019 Rizhao Steel is the 26th largest manufacturer of steel in the world, producing about 14 million tonnes of liquid steel. As for Du Shuanghua, he continues to make the Forbes list of billionaires, as this merger was very profitable for him. He is today a philanthropist who donates to youth causes.