Posted on 08 Nov 2016
POSCO Daewoo will take over POSCO P&S's steel-marketing and other units, a decision aimed at making the company the world's major steel trading company.
POSCO Daewoo has decided to merge with POSCO P&S'units dedicated to steel trading, steel-machining services and the steel scrap business during a board of directors' meeting on Nov. 4.
POSCO Daewoo said it signed the deal with POSCO P&S at the stock exchange ratio of 1 to 0.494, meaning one POSCO Daewoo share will be exchanged with 0.494 of a POSCO P&C share. POSCO Daewoo will issue new shares based on the ratio to POSCO P&S shareholders.
The merger will take effect on March 1, 2017, and POSCO Daewoo's newly issued shares will be listed on March 14.
Founded in 1983, POSCO P&S engages in steel-marketing and steel-machining services and the steel scrap business. This year, the company was merged with POSCO AST, POSCO TMC and SPFC.
This deal will streamline POSCO Group's steel-trading channel and enhance coordination between domestic and overseas steel marketing networks, which will boost the group's share of the domestic and global steel markets.
Under the deal, POSCO Daewoo also will be able to control steel marketing and steel machining services, which will make the company more effective in providing tailored products and services.
The deal is also considered to have paved the way for POSCO Daewoo to grow as the world's major steel-trading company, given that steel trading is the company's core business, along with natural resource exploration.
"The deal will present POSCO Daewoo with a more stable business structure in steel business," said POSCO Daewoo CEO Kim Young-sang. "It will also bring about various synergic effects in strategy making and financial management."
