South Korea’s largest steelmaker POSCO has initiated the process of buying a stake in HMM Co. worth about 7 trillion won ($5 billion), banking sources said. The deal is aimed at reducing logistics risks associated with rising trade barriers and geopolitical instability. POSCO’s annual logistics costs exceed $2 billion, making its involvement in the shipping business a strategic move.
According to the Korea Independent Daily, POSCO Inc.’s holding company has already entered into agreements with Samil PwC, Boston Consulting Group and a law firm to assess HMM’s business. The potential deal concerns KDB’s 36.02% stake in the carrier, but after HMM buys back its shares, its stake could be reduced to 30%. If purchased, POSCO will manage HMM jointly with KOBC, which has no plans to sell its stake yet.
Interest in HMM has been ongoing since 2020, when the company turned a profit for the first time in a decade. Earlier, talks on selling shares with Harim Group fell through due to disagreements over management terms. For POSCO, a possible deal looks more justified against the backdrop of falling profitability in metallurgy and the supply of raw materials for batteries, as well as the need to strengthen control over transport flows.
