Tue, Sep 29, 2009 - Page 11 News List

Top South Korean steelmaker Posco mulls Daewoo bid

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Posco, South Korea’s largest steelmaker, may bid for Daewoo International Corp, which is leading a Myanmar gas project, as part of an expansion strategy. Daewoo International shares surged.

Posco will decide once the trader is officially put up for sale by state-run Korea Asset Management Corp, Choi Doo-jin, a spokesman for the Pohang-based steelmaker, said by phone yesterday. MoneyToday reported the plan earlier.

Posco is this year buying Vietnamese and Korean mills and building new plants as it bets global commodity demand will rebound. Korea Asset said last week it would select arrangers “soon” for the sale of its controlling 35.53 percent stake in Daewoo International.

Korea Asset will accept by Oct. 13 applications from investment banks interested in managing the sale, it said yesterday in a statement.

Daewoo International based in Seoul, rose 10 percent to close at 36,450 won (US$30.48) in Seoul trading, compared with a 0.9 percent fall in the benchmark Kospi index.

The former unit of the failed Daewoo Group has a 51 percent stake in a gas project in Myanmar.

The Shwe, Shwe-Phyu and Mya areas in the A-1 and A-3 blocks are estimated to hold between 4.5 trillion and 7.7 trillion cubic feet of gas in total.

Posco “isn’t very interested” in a bid for Daewoo Engineering & Construction Co, South Korea’s third-largest builder, because there could be “less synergies,” Choi said.

Daewoo Engineering has been put on sale by Kumho Asiana Group.

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