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Biz News Korea(Eng)
Posco E&C to complete horizontal merger of Posco Engineering by Feb
- Collected
- 2016.11.24
- Distributed
- 2016.11.28
- Source
- Go Direct
Steelmaking group Posco has been spearheading with restructuring over the last two years as overcapacity and global slump weighed down its bottom line and competitiveness. It opted to amalgamate Posco Engineering into the construction unit as it would take long to find a buyer. The stock exchange ratio would be 1:0. Posco E&C owns 95.5 percent in Posco Engineering.
Posco E&C will shed 500 employees through a voluntary retirement program by the year-end. Posco Engineering already reduced workforce by 450 from 1,000. It would make the first horizontal merger in the construction sector struggling with stumble in overseas drilling operation and poor global economy.
Posco E&C will pay Daewoo Engineering & Construction that owns 3.26 percent and other minority shareholders with combined 1.18 percent at 10,776 won ($9.11) per share, costing the company about 4.8 billion won for the amalgamation.
The assets, capital, and workforce of Posco Engineering will be transferred. Reorganization after merger will be announced in shareholders’ meeting in early December.
By Park In-hye
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