CCI Approves POSCO India’s Acquisition of Shareholding in POSCO-India Pune Processing Center

POSCO India Processing Center to Acquire Full Ownership of POSCO-India Pune Processing Center, Strengthening Presence in Steel Processing and Distribution Market.

The Competition Commission of India (CCI) has granted approval for the proposed acquisition of shareholding in POSCO-India Pune Processing Center Private Limited (Target) by POSCO India Processing Center Private Limited (Acquirer), a subsidiary of POSCO Holdings. This strategic move will see POSCO India Processing Center acquire the entire shareholding of LX International Corporation, the current shareholder of POSCO-India Pune Processing Center.

POSCO India Processing Center, a subsidiary of POSCO Holdings, is a prominent player in the steel industry, specializing in the processing and distribution of a wide range of value-added finished steel products. These products include hot-rolled coils, sheets, and plates; cold-rolled coils, sheets, and plates; galvanized steel products; specialty and electrical steel; as well as other steel products such as steel wire rods, scrap, and coils.

Similarly, POSCO-India Pune Processing Center, through its affiliates and subsidiaries, is actively engaged in the same broader steel processing and distribution market, focusing on the same categories of value-added steel products. The Target has made significant contributions to the steel sector in India, particularly in the production and processing of high-quality steel products used across various industries. Key Details of the Transaction:

Acquisition Structure: The proposed transaction will involve the Acquirer’s full acquisition of the shareholding currently held by LX International Corporation in POSCO-India Pune Processing Center.

Affiliation: Both the Acquirer (POSCO India Processing Center) and the Target (POSCO-India Pune Processing Center) are subsidiaries of POSCO Holdings, one of the world's leading steel manufacturing conglomerates. The acquisition will strengthen the relationship between these entities and streamline their operations.

Seller Information: LX International Corporation, the current shareholder and seller, is an unrelated entity to POSCO Holdings, thus ensuring that the transaction remains within the family of POSCO entities.

Significance of the Acquisition:

This acquisition marks a key development in POSCO India's strategy to strengthen its foothold in the Indian steel market. By acquiring full ownership of POSCO-India Pune Processing Center, POSCO India Processing Center will be better positioned to expand its portfolio of value-added steel products and improve its market share in the processing and distribution segments.

Additionally, the transaction is expected to lead to synergies between the two subsidiaries of POSCO Holdings, particularly in terms of operations, cost efficiencies, and market outreach. The acquisition enhances POSCO’s capacity to cater to the growing demand for high-quality steel products in India, a key market for the global steel giant.

Market Impact:

The approval from the CCI reflects the Commission’s assessment that the proposed transaction is unlikely to significantly harm competition in the Indian steel processing and distribution markets. Both entities involved in the acquisition operate in similar segments, but the acquisition is expected to streamline their combined operations, enhancing their ability to meet customer needs in a rapidly evolving market.

POSCO’s acquisition aligns with its broader strategy of strengthening its position in the Indian market, especially as demand for steel products continues to grow across various sectors such as automotive, infrastructure, and construction.

Conclusion:

With the CCI’s approval, POSCO India Processing Center is set to take a significant step toward consolidating its operations in India’s steel processing industry. The transaction will not only expand POSCO’s presence in the market but will also drive further innovation in the production and distribution of value-added steel products, benefiting both the company and the Indian economy at large.