POSCO to Acquire Malaysian Steel Firm in 1st Overseas M&A
By Ryu Jin
Staff Reporter
POSCO, the top South Korean steel maker, said Wednesday that it has struck a deal to take over a Malaysian steel manufacturer for $15.6 million (roughly 14.6 billion won) in its first acquisition of a foreign company.
Under the deal signed in Kuala Lumpur, the South Korean firm decided to buy a 60-percent stake in MEGS, a manufacturer of electrolytic galvanized coils with an annual production capacity of 120,000 tons, the company said in a regulatory filing.
``We are going to complete the process for the acquisition early next year to acquire the management rights as the largest shareholder,’’ a company official said. ``It will help us make inroads into the growing steel market in the Southeast Asian country.’’
POSCO plans to utilize its technology and management capability to bolster facilities of MEGS for production of high value-added products, such as the anti-finger printed steel sheets for electric home appliances.
Samsung, Sony, Panasonic and other companies run factories in Malaysia to produce home appliances, which use a lot of electrolytic galvanized steel sheets. But they largely rely on imported materials due to the poor quality of products made by local firms.
POSCO has set its sights on the Southeast Asian region in recent years. While it is an emerging market for automobiles as well as home appliances, the region still lacks integrated steel mills.
POSCO, which has pursued the expansion of local facilities in Thailand, Malaysia and Indonesia since the late 1990s, began construction of a factory for cold rolled steel sheets in Vietnam last August.
Company officials said that the steel maker would not only push for the expansion of factories abroad but also for mergers and acquisitions (M&As) with overseas steel manufacturers.