State-run Saudi fund seeks a piece of PoscoSaudi Arabia’s Public Investment Fund (PIF) is in talks to buy a stake in South Korean steelmaker Posco’s engineering and construction unit as ties strengthen between the company and the state-backed investor.
Posco is still considering the sale, with a decision to be made in the first half of the year, according to a spokesman at the Posco Engineering & Construction Company unit, who asked not to be identified according to company policy. He declined to comment on the size of the stake.
The Saudi state-run investment fund is seeking to buy as much as 40 percent of the unit, according to three people with knowledge of the matter, asking not to be identified as the information is private. PIF is working with JPMorgan Chase and Saudi Arabia’s National Commercial Bank on the deal, they said.
A 40 percent stake is worth about $850 million based on the unit’s current market value.
Saudi Arabia is allocating a record amount of money to build roads, industrial centers and airports as it seeks to cut its energy dependency and stimulate economic growth.
PIF is one of several bodies the kingdom uses to invest its oil wealth. The fund holds stakes in several listed Saudi companies, including Saudi Basic Industries, one of the world’s biggest producers of petrochemicals.
Posco E&C rose 1.6 percent as of 9:43 a.m. in Seoul, according to data from Freeboard, an over-the-counter market managed by the Korea Financial Investment Association.
Its construction projects range from steel and power plants to harbors and skyscrapers, according to its website.
A spokeswoman for JPMorgan declined to comment, while representatives at National Commercial Bank weren’t immediately available to comment.
More in Industry
SK Telcom merges two security services subsidiaries
KDB requests sit-down with Asiana unions about takeover
Are you Taycan to me?
Facebook hit with $6 million penalty for customer data leak
Spinoff to give LG chairman's uncle his own conglomerate