South Korea's POSCO is accelerating the restructuring of its overseas non-core subsidiaries by continuing to sell its electrical steel division in China and its construction branch in Vietnam. This is reported by Business Korea.
According to sources in the investment banking industry, at the end of last week POSCO International agreed to sell 100% of its stake in Suzhou Pohang Special Steel to China's Guangdong WCAN Magnetic Material. The deal is expected to close on June 30, and its value is estimated at approximately $28.9 million. The Suzhou-based company is engaged in the production of electrical steel and the manufacture of engine components in Eastern China.
It is reported that POSCO International has decided to exit the Chinese steel market due to its oversaturation, which makes further competition with local players unproductive. In addition, due to geopolitical risks, including trade tensions between the United States and China, the business environment is deteriorating for South Korean conglomerates operating in China.
At the same time, POSCO E&C is also negotiating the sale of its Vietnamese subsidiary. The auto parts manufacturer S. has been selected as the main bidder.
I. Casting, the parties are currently negotiating. POSCO E & C Vietnam has implemented a number of general construction projects in Vietnam.
These steps reflect a broader strategy to exit low-margin overseas operations and focus resources on fast-growing sectors.
