Dongkuk Coated Metal Co. (Dongkuk CM), the cold-rolled steel unit of South Korea's Dongkuk Holdings Co., has agreed to buy Aju Steel Co. specializing in color coated steel in a 128.5 billion won ($93.4 million) deal.
The acquisition will position Dongkuk CM, an affiliate of Dongkuk Steel Mill Co., as the world's largest producer of color coated steel, with an annual production capacity of 1.23 million tons.
Dongkuk CM said on Tuesday that it has signed an agreement to buy a 56.6% stake in Aju Steel for 128.5 billion won and complete the purchase in December this year.
Under the deal, Dongkuk CM will acquire a 42.5% stake in Aju Steel from its CEO Lee Hak Yeon for 78.5 billion won and will purchase 8.6 million new shares through a third-party allocation for 50 billion won.
Aju Steel is currently the fourth-largest domestic producer of color coated steel, with an annual production capacity of 280,000 tons.
Color coated steel sheets, used in premium TVs and home appliances like refrigerators and washing machines, account for 50.6% of its total sales. Steel products used for premium TVs made up 33.2% of the sales.
After the acquisition, Dungkuk CM's domestic market share will increase to 34.4% from 29.7% based on its production volume in the first half of this year, overtaking market leader KG Dongbu Steel Co.
Write to Woo-Sub Kim at
duter@hankyung.com
