Monday, June 30, 2008

Posco's buyout puts Macarthur's ownership in haphazard condition

South Korean POSCO Coated & Color Steel Co., Ltd. (SEO:058430), world’s third largest steel producing company, today announced that it had agreed to buy 10% stake in Asutralia’s Queensland-based Macarthur (ASX:MCC), the largest producer of pulverized coal from its former director Ken Talbot. Posco Steel will pay 20 Australian dollars per share ($19.24). The deal is waiting for approval by the South Korean company’s board.

On June 29th, ArcelorMittal (AMS:MT), world’s no.1 steelmaker, announced that it purchased another 5% stake of Macarthur making its total amount of stake at Macarthur 20% (19.9%). ArcelorMittal also paid similar price per share. In total, ArcelorMittal paid 212 million Australian dollars. Till now, the company invested around 843 million Australian dollars. The current deal is waiting to be finalized by Foreign Investment board.

The buyout by POSCO has put Macarthur’s ownership in a haphazard state. No, other company will think about buying stakes of Macarthur anymore. Now, Macarthur has three major shareholders: ArcelorMittal, Posco, and Chinese company, CITIC Group. As the price of iron ore is going up, major steel makers around the world are now going for such buyouts to keep the supply of raw materials constant.

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ABC News