Korean Public Fund Oversight Committee Allows POSCO’s Daewoo Buy

POSCO and Korean Public Fund Oversight Committee signed a memorandum to allow POSCO’s acquisition of Daewoo International, the largest general trading company in South Korea, on May 25. POSCO will acquire Daewoo’s shares from Korean Asset Management Corporation (KAMCO) and other parties. KAMCO presently holds Daewoo’s 68.8% shares and POSCO will hold 50% or more shares until the end of July. The total acquisition cost is estimated to exceed 3.5 trillion won (approximately 253 billion yen).

POSCO has sought acquisition of a general trading company to globalize its steel business. Then POSCO tendered a bid for KAMCO’s sales of Daewoo’s shares. POSCO and Lotte Group offered bids by the end of April 2010, and POSCO was given the first negotiating right on May 14.

The committee evaluated POSCO’s global strategy for process industries of steel and nonferrous metals as well as the financial condition to have cash at 5.8 trillion won as of the end of September 2009.

POSCO will take a general trading company with annual revenue of 10 trillion won into the Group if the acquisition successfully completes. The acquisition is expected to contribute to POSCO’s global business enhancement. At the same time, POSCO can become advantageous when Daewoo Shipbuilding’s shares will be sold in the second half of 2010.