S.Korea's POSCO bids for Daewoo International

South Korea's top steel maker POSCO on Wednesday submitted a letter of intent to buy a controlling stake in Daewoo International Corp., the company said. POSCO showed interest in the purchase, explaining it would have a synergy effect on its existing business. "The acquisition of Daewoo International could generate synergy with our business as the local trading company is involved with most of our products, while its energy development business will help us procure raw materials," Lee Sang-chun, a spokesman for POSCO, was quoted as saying by South Korea's Yonhap News Agency.
Already submitting a bid for Daewoo Shipbuilding & Marine Engineering, the steelmaker is advancing further into the nation's M&A market, seeking a more concrete status among its peer conglomerates, local media here said.
According to a media report, POSCO's acquisition of Daewoo International and Daewoo Shipbuilding & Marine Engineering, if realized, will put the nation's No. 5 conglomerate into a more advantageous position.
With its total assets already amounting to 4.9 trillion won (4. 25 billion U.S. dollars), an M&A with the 400 billion-won (346.6 million-U.S. dollar) Daewoo International and 1.6 trillion-won (1. 39 billion-U.S. dollar) Daewoo Shipbuilding can not only secure its solid status but also threaten No. 4 LG Group with 6.8 trillion-won (5.9 billion-U.S. dollar) worth assets, the report said.
After announcing in mid-December that it would wrap up the sale of Daewoo International Corp. in the first half of 2010, the state- run Korea Asset Management Corp. (KAMCO) put the company up for sale in January.
KAMCO, which holds a 35.5 percent portion in the company, sought to sell a 50 percent stake plus one share with other state creditors who have a combined 32.65 percent stake in the firm, putting the deadline for bidders by 5:00 p.m. (0800 GMT) Wednesday.
In spite of market speculation that other business tycoons, such as LG and Hanwha, would turn in the bid for Daewoo International, POSCO came as the only bidder.
In the meantime, POCO saw a 3.06 percent decline in its share prices, together with Daewoo International whose share price fell 2.51 percent.