Seoul: The so-called Sage of Omaha has given the thumbs down to shipbuilding prospects. Warren Buffett, the world's most famous investor and one of the richest men on the planet, has reportedly told Korean steel mill, Posco, his company Berkshire Hathaway will not support Posco's bid for Daewoo Shipbuilding & Marine Engineering (DSME), fearing a prolonged downturn for the global shipbuilding industry. Berkshire has a 4.5% stake in Posco.
Posco's ceo Chung Joon Yang is spearheading a $30 billion expansion that includes plans to build plants in India and Indonesia as demand recovers after the global recession. Chung said in January Posco will consider bidding for DSME, the world's third-biggest shipbuilder. ?
"This is a blow to Daewoo Shipbuilding shares today because it could mean that the sale will fail again," Cho In Karp, head of research at Heungkuk Securities Co told Bloomberg in Seoul. "Posco is the only company that has the cash on hand to buy a company of this size." DSME shares tanked the most in four months today on the news.
State-owned Korea Development Bank and Korea Asset Management Corp. scrapped plans to sell their 50 percent stake in Daewoo Shipbuilding last year in the hope of attracting a higher price. [25/03/10]?
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