POSCO Braces Itself for
Hostile M&A by ArcelorMittal

MOCIE Minister Kim stresses Korea's unrivaled technology prowess and continuous management innovation amid a global competition

POSCO Chairman & CEO Lee Ku-taek stressed the need to forge a tripartite alliance among Korea, Japanese and Chinese steel makers to overcome any hostile M&A bids by the world's largest juggernaut ArcelorMittal.
POSCO Chairman Lee observed that Baosteel, now listed on the Shanghai stock exchange, should be placed on such internationally recognized stock exchanges like for instance the Hong Kong Stock Exchange to forge a strategic alliance, including an equity-sharing agreement, as POSCO and Nippon Steel achieved. "A tripartite alliance (among POSCO, Nippon Steel and Baosteel) could be possible in the future,"he forecast. Lee made the remarks during a meeting with reporters after holding an anniversary ceremony marking the 8th Iron Day held at the POSCO Center in Daechi-dong, Seoul on June 8.
Asked whether the stock price hike has allowed POSCO to maneuver against a hostile M&A threat
POSCO Chairman Lee replied that such thinking about hostile M&A threats is still awakening him during nighttime. The chairman noted that his company will come up with countermeasures designed to nip in the bud any possibility of making a hostile M&A, while denying that POSCO's crisis concerning a hostile M&A is overblown.
The best ways to take against a hostile M&A bid, Chairman Lee said, are to secure more friendly shareholders and raise the aggregate value of listed stocks of steel makers. If the aggregate value of the listed stocks go up, he predicted that there would be small-sized M&As rather than large-sized ones. He added that he has been carefully watching stock price movements of the top eight global steelmakers.
In his speech during a ceremony marking the 8th Iron Day, POSCO Chairman Lee also touched on the heated-up global competition in the world steel industry. In the wake of China's rapid rise, the global steel industry is entering "an era of mega-competition's an acceleration of global integration, getting bigger and scrambling to secure raw materials, he opined.
He said steelmakers should focus on at least three out of the five strengths - size of production, low production cost, high quality, global network and rapid management decision-making -to tide over a deficiency of resources and soaring personnel costs and survival competition.
ANNIVERSARY CEREMONY. The 8th Iron Day was observed at the POSCO Center in Seoul on June 8 with about 300 people , including Minister of Commerce, Industry and Energy Kim Young-ju, Korea Iron and Steel Association Chairman Lee Ku-taek in attendance.
During the ceremony, 21 people were presented with government orders, medals and other citations in recognition of their contribution to the development of the domestic steel industry. SeAH Steel Corp. President Gong Won-iel was conferred the Order of Industrial Merit, Silver Tower, while Choi Soo-sung, senior executive director of KISWIRE, was awarded with the Industrial Service Medal.
The Iron Technology and Iron Technician Awards went to five persons, including Koo Kwang-deok, a team leader of Dongkuk Steel.
MOCIE Minister Kim said in his congratulatory speech during the ceremony that the global steel industry is swirled by business upheavals spurred on by heated competition with a newly rising steel exporter, China, the emergence of such dinosaurs like ArcelorMittal and stepped-up competition in securing raw materials.
Minister Kim stressed the need for unmatched technology prowess like the development of the world's first FINEX technology and continuous management innovation to tide over global competition.
He said, "the government is striving to step up diplomatic efforts to secure mineral resources abroad, while supporting our companies to devote themselves to developing technology with a challenging spirit and innovative mindset. nw

(left photo) MOCIE Minister Kim Young-ju speaks during a Steel Day anniversary event. MOCIE Minister Kim, POSCO Chairman Lee Ku-taek, chairman of Korea Iron &Steel Association,Dongkuk Steel Chairman Chang Sae-joo, SeAH Steel Chairman Lee Yoon-hyong and KISWIre Chairman Hong Young-chul pose for the camera during an anniversary event.