POSCO says may bid for $1 billion Korea Express stake

POSCO, the world's No 3 steelmaker, said on Tuesday that it plans to review entering a bid for a controlling stake worth about $1 billion in Korea Express, a deal that could become its second major acquisition in less than a year.

Major shareholders of Korea Express Co Ltd -- Asiana Airlines Inc, a Kumho Asiana Group subsidiary, and Daewoo Engineering & Construction Co Ltd -- are considering selling a combined 47.9% stake in the country's top logistics company, worth about $903 million at the Tuesday's closing share price.

"We'll review Korea Express once the auction schedule is officially confirmed," said POSCO spokesperson Choi Doo-jin.

The sale would help cash-strapped Kumho Asiana Group secure further liquidity after a debt-fueled acquisition forced it to sell Daewoo Engineering & Construction to key creditor Korea Development Bank for $1.9 billion this month.

A deal with steelmaker POSCO would complement the recent acquisition of the country's biggest trading firm and reduce logistics costs, which some analysts estimate could account for a tenth of POSCO's revenue.

The deal, if it moves forward, would also be the second major acquisition by POSCO after it completed the $3 billion purchase of Daewoo International Corp last quarter, its biggest ever M&A.

It is also reviewing purchasing Elkem, a Norwegian maker of silicon for solar panels, as South Korea's sixth-largest business group by assets looks to expand through the steel supply chain into shipping and the fast-growing renewable energy materials segment.

POSCO CEO Chung Joon-yang has trumpeted a record 9 trillion won investment and acquisition spree this year.

Shares in POSCO, which counts billionaire Warren Buffett's investment vehicle Berkshire Hathaway Inc as its major shareholder, closed up 5.1% at a two-month high on Tuesday, its biggest daily percentage gain in six months.

The stock was mainly helped by expectations of solid demand growth amid economic recovery hopes for the United States and Europe.

Shares in Korea Express jumped 3.6%, beating the 0.8% rise on the Korea Composite Stock Price Index.