A strategic partnership between Baosteel Gases and Warburg Pincus has been established with a view to joint exploration and project development in the fields of industrial gas and clean energy.

The two companies have reached agreement with Henan Jinkai Chemical Investment Holding Group to acquire its assets for 3 billion yuan ($488 million).

Baosteel Gases, a wholly-owned subsidiary of the Chinese steel giant, the Baosteel Group, is heavily involved in the business of industrial and synthetic gases as well as packaged gases and new energy in China.

Warburg Pincus is an American private equity investment business with expertise in a variety of sectors including energy. The company has more than $39 billion in assets under management and has invested over $50 billion in 720 companies globally. It entered the Chinese market in 1994 and has invested over $4 billion in leading Chinese companies.

Jia Yanlin, chairman of Baosteel Metal, said the partnership with Warburg brings together ‘the best players in their respective fields’.

“I am confident that the co-operation will accelerate the growth of Baosteel Gases in its efforts to become China’s most competitive industrial gas provider,” Yanlin added.

• Baosteel recently announced that its net profit for H1 2014 amounted to 3.15 billion yuan ($489 million), down 14% on the previous year.

Source: China Metals.