Posco buys majority stake in Daewoo International for $2.83 billion
30 Aug 2010
Posco, the world's fourth largest steel producer, has acquired a majority stake in South Korean trading and resources firm Daewoo International Corporation for 3.37 trillion won ($2.83 billion).
South Korean steel major Posco today signed a deal to acquire a 68.15-per cent stake in Daewoo International in order to secure a steady supply of raw materials and expand its sales network.
The agreement was announced by the state-run Korea Asset Management Corporation (KAMCO), the biggest shareholder in the bankrupt Daewoo International, which had chosen Posco in May as the preferred bidder in the two-way auction with Korea's largest retailer Lotte Group. (See: POSCO beats Lotto to acquire Daewoo in a $3 billion deal)
Posco's bid price was above 3.4 trillion won ($3 billion), slightly above Lotte's 3.3 trillion won bid. Posco also led in other parameters like business synergy and was the preferred bidder.
KAMCO was set up by the Korean government to purchase, manage and dispose of non-performing assets in the Korean financial sector. Its purpose is to minimize restructuring costs, maximize the recovery of non-performing assets and restore soundness to the Korean financial sector.
Daewoo International was spun off from Daewoo Corporation in 2000, as part of the group's ''workout'' restructuring. Daewoo International engages in exporting, importing, and triangular trading activities in South Korea. The company's steel products include API materials, automotive flat products, and electrical flat products.
