U.S. News

Posco Is Discussing Cooperation with Mittal


World No. 4 steel maker POSCO of South Korea, said on Friday it was discussing cooperation with Arcelor Mittal, the world's largest steel maker, but no major progress had been made.

"Both sides have discussed cooperation in various ways such as overseas projects and raw material development ... But we have made no specific progress and no details have been decided yet," a POSCO official said.

The comment came after a local newspaper reported on Friday that Mittal and POSCO may strike a partnership deal which could remove a potential takeover threat against POSCO.

Both companies have talked about possible business cooperation since a senior official at Mittal visited POSCO in February, the official said. "But talk of a strategic alliance between the two companies is going too far," he added.

Roland Junck, a member of Arcelor Mittal's management board, met POSCO's Chief Executive Lee Ku-taek in February, and the meeting sparked market speculation on possible M&A.

POSCO has a fragmented, foreign-dominated share ownership and is seen by some as a prime takeover target in the wave of global consolidation that began last year, when Mittal bought Arcelor.

Japanese media reported earlier this week that Arcelor Mittal would sign a new partnership deal with Nippon Steel on technology transfer and capacity expansion.

POSCO and Nippon Steel last year expanded capital and business ties in moves interpreted as aiming to deter potential predators. Nippon holds 5.32% of POSCO and the South Korean company has 3.81% of Nippon.