General Steel Holdings Inc., a Chinese steel producer, said Wednesday it has signed a letter of intent to buy 80 percent of Yantai Steel Pipe Co. Ltd.

    Beijing-based Yantai, part of Laiwu Iron & Steel Group, will become a joint venture when the proposed deal closes, with Laiwu retaining a 20 percent ownership stake.

    Financial terms were not disclosed.

    The joint venture would preserve the existing production systems of Yantai and build a new production line for hot rolling seamless pipe, General Steel said in a statement.

    It will make oil, boiler and hydraulic pipe, as well as pipe used in mechanical structures.

    The joint venture's production capacity is expected to be 500,000 tons to 600,000 tons annually.

    A subsidiary of Yantai Steel Pipe, Yantai Lubao Steel Pipe Co., is nearly 80 percent owned by Chinese iron and steel maker Baosteel Group Corp.

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