POSCO buys domestic stainless firm

(ATTN: ADDS more details in paras 3-4; UPDATES share price in last para)
SEOUL, May 12 (Yonhap) -- POSCO, the world's fourth-largest steelmaker, said
Tuesday that it has agreed to buy a 65-percent stake in a local stainless
steelmaker in a bid to ease a supply glut in the domestic steel market.
Neither company provided detailed terms, including the price, of the deal that
marks POSCO's first merger and acquisition of the year.
Earlier this year, POSCO chief executive officer Chung Joon-yang said the company
would seek to take over a series of firms both at home and abroad this year on
the back of ample cash supplies estimated at more than 4 trillion won.
POSCO currently owns 19.9 percent in Taihan ST Co., set up in 2007 by POSCO and
Taihan Electric Wire Co. to produce stainless steel.
"The takeover of Taihan ST will help soften a supply glut in the domestic steel
market," said an official at POSCO. "Also, POSCO will be able to boost its
competitiveness in the stainless steel sector."
Taihan Electric Wire has sought asset sales in recent months to secure cash.
Shares of POSCO closed at 425,000 won (US$342) on the Seoul bourse, down 1.62
percent.
sam@yna.co.kr
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