Three listed units of China’s Hebei Iron and Steel Group, the world’s fourth-largest steel maker, said on Tuesday they had won regulatory approval to combine, forming the country’s No.2 listed steel maker.

The Chinese government has sought to consolidate its fragmented steel industry, as it seeks to bulk up bargaining power in iron ore annual price negotiations with mining giants Vale, BHP Billiton and Rio Tinto.

The new firm will unify Tangshan Iron and Steel Co., Handan Iron and Steel Co and ferroalloy producer Chengde Xinxin Vanadium and Titanium Co. via the three-way merger.

Handan and Chengde would be delisted after transferring all of their assets into Tangshan, while Tangshan would be renamed to Hebei Iron and Steel Co Ltd., becoming the sole listed unit of the state-owned parent company.

The three listed steel mills are all part of the state-owned Hebei Iron and Steel Group, and merging them would be a first step towards listing all of the group’s major steel assets.

Hebei Iron and Steel Group has said it would inject assets of other major units in the merged listed company. Baosteel Group, parent of Baoshan Iron and Steel (600019.SS), is currently China’s biggest steel maker.

Hebei Iron and Steel Group is based in the province of Hebei, which encircles Beijing and was home to one-fifth of China’s steel production in the last year.

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