POSCO Mulling Overseas Steel Merger

“In line with the trend of M&A in the international steel industry, POSCO is also considering an M&A with a foreign company. At this stage, we are considering a steelmaker in Asia, including China,” said Lee Ku-taek, the CEO of POSCO.

“The steel industry has reached its limit in growth in its domestic market,” Lee said recently during an exclusive interview with the Dong-A Ilbo. This clearly indicates POSCO’s wiliness to execute M&A deals.

“POSCO is working on an M&A project. We are carefully reviewing the exact timing and the list of companies,” he added.

“I am watching (the news) with interest.” Lee said in regard with the recent speculation over POSCO’s acquisition of Daewoo Shipbuilding & Marine Engineering.

In response to Hyundai Steel’s building an integrated steel mill with a melting furnace by 2010, Lee said that Hyundai is more threatening to POSCO because it is located at a closer place. “Hyundai Steel is one of the major factors making POSCO feel threatened.”

POSCO will focus on the steel sector while making investment in steel-related sectors that have potential in growth like magnesium or electricity for generators. “POSCO will become a leader in the global steel industry through active investment and development of new and original technologies like FINEX,” Lee stressed.

aryssong@donga.com