By Kim Tae-gyu
Staff reporter
POSCO, the world's fourth-largest steel maker, was chosen as the preferred bidder for Daewoo International, a domestic trading company that specializes in exploring overseas resources.
The Korea Asset Management Corp. (KAMCO) said Friday that the state-run agency has chosen POSCO as the preferred negotiator in the two-way auction with the Lotte Group.
``We factored in the bid prices most where POSCO outrivaled Lotte. In non-financial segments, POSCO also was tantamount to Lotte. Hence, we came up with a decision in favor of POSCO,'' a KAMCO official said.
As non-financial factors, KAMCO considered whether the bidders had sufficient capacity in securing funds, their expected synergy, the stability of labor-management and their business strategies.
The agency didn't disclose the amount of investment the two bidders had offered.
Although speculation is that for the 68.1 percent of Daewoo International, POSCO reportedly offered around 3.5 trillion won ($3.1 billion), about 200 billion more than that of Lotte.
If POSCO eventually takes over Daewoo, it is expected to benefit from the latter's competitiveness in exploring overseas resources.
Lotte was very keen to take control of Daewoo's international trading networks and oil exploration projects.
The retail conglomerate was also interested in acquiring a 23-percent stake in Kyobo Life held by Daewoo International. However, some observers have taken issue with the lack of financial leeway of Lotte.
In comparison, POSCO has generated a large bundle of cash thanks to its lucrative steelmaking business.