Seoul: South Korea's steel giant POSCO has approached SK Group with a proposal for joint acquisition of part of Daewoo Shipbuilding & Marine Engineering (DSME) shares, according to a local media report. POSCO had been seen to go it alone in bidding for the DSME shares held by two South Korean state-run banks. The steelmaker is now looking for a possible partner, as the planned buyout would require an enormous amount of money.
According to the report, POSCO has informally proposed that it and SK jointly acquire around 10% of the DSME shares held by the two banks (equivalent to 5% of the total outstanding shares). The two companies now appear to be engaged in working-level consultations.
POSCO and SK have close mutual relations, engaging in cross-holding of shares. POSCO has apparently named SK as the latter's affiliates SK Shipping and SK Energy can generate synergetic effects with DSME.
For potential bidders, the biggest problem is how to raise a huge buyout fund that could total up to 10 trillion won. [30/6/08]
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