May 11 2007
POSCO concluded strategic tie-up with Hyundai Heavy Industries Co., Ltd. which is the largest shipbuilder in the world, and Dongkuk Steel Mill Co., Ltd to intensify mutual cooperation in joint technology development and stable supply of steel material, and etc.
POSCO held the BOD meeting at POSCO Center on April 26, concluded strategic alliance with Hyundai Heavy Industries Co., Ltd through the exchange of shares and with Dongkuk Steel Mill Co., Ltd for stabilization of domestic cold rolling market by mutually exchanging shares of Pohang Coated Steel Co., Ltd and Union Steel Mfg Co., Ltd. owned respectively by both companies.
POSCO anticipates joint development of high quality steel for shipbuilding, high value-added steel product such as cold rolling steel product and related technologies, and secure stable steel demand by this cooperation.
Accordingly, POSCO and Hyundai Heavy Industries Co., Ltd. decided to buy in through block trading of stocks applying the closing price of 27 before opening of stock market on 30, Hyundai Mipo Dockyard Co., Ltd, an affiliated company of Hyundai Heavy Industries Co., Ltd bought in 872,000 stocks of POSCO through the money trust for buyback of POSCO and POSCO purchased 1,477,000 stocks of Hyundai Heavy Industries Co., Ltd
owned by Hyundai Mipo Dockyard Co., Ltd. Both companies from now on plan to respond actively to developing countries such as China, which are pursuing domestic shipbuilding and steel industries extending basis of steel demand by jointly developing technologies for high quality steel for shipbuilding such as TMCP steel etc. and expanding joint marketing activities targeting overseas ship owners. And POSC bought in 1,005,000 stocks corresponding to 9.8% of the total shares of Union Steel Mfg Co, Ltd owned by Dongkuk Steel Mill Co., Ltd based on the closing price of April 26 on 27, and Dongkuk Steel Mill Co., Ltd acquired 588,000 stocks corresponding to 9.8% of the total shares of Pohang Coated Steel Co., Ltd based on the closing price of April 26 on 27. Dongkuk Steel Mill Co., Ltd plans to buy in stocks of POSCO in the stock market in the amount corresponding to the balance between purchasing prices of Union Steel Mfg Co., Ltd and Pohang Coated Steel Co., Ltd.
Both companies will be able to raise mutual competitiveness one step further through this since POSCO will be able to secure stable market for cold rolling product in the excessively competing domestic market, and Dongkuk Steel Mill Co., Ltd will be able to reduce new investment for cold rolling and galvanizing facilities etc.