Hyundai Steel, a steel arm of Hyundai Motor Group, said Wednesday that the company would take over its sister steelmaker Hyundai Hysco as part of its efforts to become a global steel giant.

“The corporate board approved the deal and will host a shareholders meeting on May 8 for endorsement,” the nation’s second-largest steelmaker said in a regulatory filing to the financial authorities.

“We are expecting to close the deal by July 1, after passing the review by the nation’s antitrust watchdog Fair Trade Commission.”

For the merger deal, Hyundai Steel will issue new shares and swap them for Hyundai Hysco shares at a ratio of 1 to 0.8577.

Rumors surrounding the deal have risen since Hyundai Steel took over the auto steel sheet-making division of Hyundai Hysco in January 2014.

Industry sources said Hyundai Steel, which is heavily dependent on Hyundai Motor Group and has a poor global business track record, has longed for Hyundai Hysco’s extensive overseas sales network.

Hyundai Hysco runs steel service centers in 11 countries, including the U.S., China and India.

“The company expects the deal to boost capability of overseas businesses and business diversification,’’ Hyundai Steel said in a statement.

Industry watchers said the steelmaker is expected to tap into the global auto steel markets by leveraging the overseas arms of Hyundai Hysco as its rival POSCO does.

The merger deal is also forecast to have an impact on the landscape of the nation’s steel industry.

“The nation’s steel industry, where POSCO has dominated, will be restructured with two super steelmaking giants,” an industry insider said.

The deal will lift Hyundai Steel’s volume, with sales of the merged company to reach 20 trillion won ($18.3 billion) and its annual steel production capacity to increase by 2.8 million tons.

“We are confident about becoming one of the world’s top 10 steelmakers by volume,” a Hyundai Steel executive said. Hyundai Steel was ranked the 14th in steelmaking capacity in 2014.

By Seo Jee-yeon (jyseo@heraldcorp.com)