The China Securities Regulatory Commission (CSRC) has approved the merger of Tangshan Iron & Steel Co. with Handan Iron & Steel and Chengde Xinxin Vanadium & Titanium Co., paving the way for Hebei Iron and Steel Group (Hebei Steel), their parent, to become the country's second largest steel maker, China Daily reported Tuesday.

Shares of the three arms -- Handan Iron & Steel Ltd., Tangshan Iron & Steel Co., and Chengde Xinxin Vanadium & Titanium Co. -- were all suspended from trading starting Sept. 17 and would resume only after the regulatory review result is publicized.

After the consolidation, the crude steel production of Tangshan Iron & Steel would touch 21.2 million tonnes, up 86.4 percent from the current 11.4 million tonnes, while Hebei Steel will have a total capacity of 330 million tonnes annually, ranking second in China and the fourth in the world.

Hebei Steel also said it would inject the assets of Xuan steel and Wuyang Steel into the listed Tangshan Iron & Steel one year after the three arms' consolidation.

Xuansteel and Wuyang Steel are two high-quality subsidiaries of Hebei Steel, mainly producing steel plates and long steel products.

In the share swap, each Handan Iron & Steel share, price at 4.10 yuan (about 59 U.S. cents), can be exchanged for 0.775 Tangshan Iron & Steel share, and each Chengde Xinxin Vanadium & Titanium share, priced at 5.76 yuan, for 1.089 Tangshan Iron & Steel shares, priced at 5.29 yuan.

The new firm will have an aggregate market value of about 4 billion U.S. dollars.

The consolidation could bulk up China's bargaining power in negotiations with the three global mining giants, Vale, BHP Billiton and Rio Tinto., the newspaper said.