Seoul: South Korea’s POSCO, the world’s third largest steelmaker, said on 16 March that it is stepping up its defences to thwart any hostile takeover attempt amid reports Arcelor Mittal is looking at the company.
“The company will acquire more friendly shares for stable management,” a POSCO official said adding that shareholders counted as friendly to the management now controlled 40% of the company.
“This will help POSCO thwart a possible takeover bid by foreign firms.”
In January, shareholders approved POSCO’s proposal to ease rules on selling new shares to strategic partners following talks between chairman Lee Ku-Taek and Arcelor Mittal senior executive Roland Junck.
Arcelor Mittal, the world’s biggest steelmaker and POSCO are jostling for dominance in the rapidly growing Asian markets led by China and India.
On Friday, the Korea Economic Daily quoted an unidentified POSCO executive as saying Junck had expressed an interest in POSCO’s strategy concerning mergers and acquisitions.
POSCO’s management is studying how to react to a possible bid from Arcelor Mittal, it added.
POSCO said on16 March there had been no discussion of a merger or acquisition with Arcelor Mittal.
The South Korean company forged an alliance with Japan’s Nippon Steel, the world’s second largest steeelmaker after Arcelor Mittal, in 2000 to position itself better for a global realignment in the industry.
In October last year, they agreed to increase stakes in each other after Mittal Steel acquired rival Arcelor of Luxembourg to create the world’s largest steel group.