No MA talks with Arcelor Mittal: POSCO official

Seoul, Feb 2: A senior official at Arcelor Mittal, the world's largest steel maker, met with executives at South Korea's POSCO but the two steel giants did not raise any issues related to an acquisition, POSCO sources said on Friday.

Shares in POSCO, the world's No. 3 producer, trimmed its gains after hitting a record high in the morning on market speculation of a possible M&A discussion between the two sides.

''This visit was purely a courtesy. There was no mention about a merger or acquisition so far,'' said an official at POSCO who declined to be named.

Roland Junck, a member of Arcelor Mittal's management board, met POSCO officials on Thursday and visited steel mills in Pohang, south of Seoul, on Friday. He will visit Chief Executive Lee Ku-taek later in the day.

Junck's visit fanned speculation that the steel behemoth may be setting its sights on POSCO.

POSCO, which has a fragmented, foreign-dominated share ownership, is seen by some as a prime target for a hostile takeover given the current wave of global consolidation.

Tata Steel's recent takeover of Anglo-Dutch group Corus further spurred talk of more global mergers and acquisitions in the sector that began after Mittal Steel bought Arcelor last year.

The South Korean steel maker, however, has dismissed takeover rumours.

''There are no M&A talks with Arcelor Mittal,'' POSCO CEO Lee, was quoted as saying by local newspapers on Tuesday.

The company has been focusing on alliances with Asian steel makers to head off potential hostile takeover bids.

In October, POSCO and Nippon Steel, the world's second largest steel maker, announced measures to expand Cross-shareholdings.

Under the deal, Nippon will increase its holdings in POSCO by two percentage points from the current 3.32 percent. POSCO will buy a 1.64 percent stake in Nippon, which will add to its current 2.17 percent stake.

Mitsubishi Corp. in Japan earlier this month raised its stake in POSCO by 0.5 percentage point to 1.4 percent.

POSCO shares gained 0.88 percent to 343,500 won, underperforming a 2.19 percent rise in the main KOSPI.

REUTERS

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