POSCO coerced into deal with Dongbu Steel

South Korea's Dongbu Steel decided to sell its Incheon plant as part of a program to improve its financial structures, but no domestic steelmaker showed interest in the purchase.

Dongbu Steel's Incheon Factory mainly produces cold rolled steel sheets, galvanized sheets and steel pipes. The Dongbu Group acquired the Incheon plant in 1980. In 2013, it earned 80 billion won (US $ 75.4 million) net income. It is one of the main assets of Dongbu. Its land, pressure gauge , buildings and structures are worth 700 billion won (660 million dollars).
Many believe the sale price will be $ 1 trillion. won ($ 943 million). Negotiations on its sale are underway, but at the moment local companies are not ready to acquire it.

Unlike Korean companies, China's Baoshan Iron & Steel turned its sights on Dongbu's Incheon plant. The Chinese steel company works closely with Dongbu Steel and aggressively expresses its will to acquire the Incheon plant, and Dongbu has no reason to be against it either.

However, Korean industry leaders oppose the technology leak, arguing that Korea should not give up its homeland to China. Therefore, the local steel industry is pushing POSCO, the older brother of the Korean steel industry, to acquire.

As for POSCO, against the backdrop of the recession in the global steel industry, the company is going through the restructuring of its branches and the new acquisition will be burdensome and unprofitable for it, so POSCO sees no point in buying the Incheon plant.