Nippon Steel divests $823 million stake in Posco Holdings

Home > Business > Industry

Nippon Steel divests $823 million stake in Posco Holdings

Published: 24 Sep. 2024, 18:25

SARAH CHEA
chea.sarah@joongang.co.kr

Nippon Steel Corporation's headquarters in Tokyo [AP/YONHAP]

Japan's Nippon Steel Corporation announced Tuesday that it would offload its entire stake in Posco Holdings, citing “asset efficiency,” as it pushes hard for its proposed takeover of U.S. Steel for $14.9 billion.

The Japanese steel giant will sell 2.89 million Posco Holdings shares, or 3.42 percent of the Korean company, which are worth some 1.1 trillion won ($823 million) based on Tuesday's closing price.

The sale is “in order to improve asset efficiency through asset compression,” Nippon Steel said in a statement. “Nippon Steel will continue to promote cooperative measures with Posco Holdings and strive for further results in the future.”

The timing of the sale will be determined based on an assessment of factors such as market trends, it added.

The duo first inked a strategic alliance agreement in August 2000, which led to an another cross-purchase agreement in October 2006.

The funds will likely be used in Nippon's planned $14.9 billion takeover of U.S. Steel, which was approved by U.S. Steel shareholders but has faced strong union opposition.

U.S. presidential candidates Vice President Kamala Harris and Donald Trump are also highly opposed to the planned acquisition.

The takeover still needs approval from the Committee on Foreign Investment in the United States, a government body that examines the impacts of a sale on the country's security, which will likely come out after the presidential election in November.

Posco Holdings closed at 385,500 won on Tuesday, up 1.6 percent from the previous trading session.

BY SARAH CHEA [chea.sarah@joongang.co.kr]