(Yicai Global) Jan. 29 -- China's HBIS Group will acquire a 70 percent stake in Tata Steel of India's steel assets in Singapore, Thailand, Vietnam, Malaysia and other Southeast Asian nations.

The business in Southeast Asia will tap into the development potential of existing assets and capabilities to better serve the local market with the two groups' support in channels, technology and management, per the equity acquisition agreement HBIS Group and Tata Steel inked in Beijing yesterday.

HBIS Group formed in 2008 through the merger of Tangshan Iron and Steel Group and Handan Iron and Steel Group. Headquartered in Shijiazhuang, capital of China's eastern Hebei province, it holds nearly USD10 billion in overseas assets and has over 70 foreign branches and investments in more than 30 countries and regions and a service network spanning over 110 countries and regions.

Tata Steel's unit TS Global Holding will sell its stake in NatSteel Holdings and Tata Steel Thailand Public, The filings show.

The deal will be consummated by an entity controlled by HBIS taking 70 percent shares, while Tata Steel will get USD327 million and the remaining 30 percent stake, per the agreement. The transaction, which awaits regulatory approval, is expected to conclude within three to four months.

HBIS and Tata Steel dominate different markets and their staged development strategies can greatly complement each other, the statement said.

HBIS will seize the opportunity their cooperation affords of rapid economic development and strong steel demand in Southeast Asia. It will optimize its production capacity and product structure in the region through investment, construction and mergers and acquisitions, improve the integrated industrial chain, including steel raw materials preparation, manufacturing, deep processing and client services, and finally become a listed firm with strong sustainable development capabilities.

Mumbai-based Tata Steel is among the largest steel makers in India and one of the world's top ten.

Its business is global, and its products find wide use in the automotive, agriculture, construction, manufacturing and general engineering fields.

Editor: Ben Armour