Japan’s Nippon Steel said on Tuesday it would sell a total of
shares in South Korea’s POSCO Holdings to “improve asset efficiency,” ahead of
a planned $14.9 billion takeover of U.S. Steel.
The Japanese steelmaker announced its decision to sell 2,894,712
shares of POSCO Holdings for 1.1 trillion won ($827 million) to improve capital
efficiency in a press release on Tuesday.
Nippon Steel owned around 3.4 percent of POSCO Holdings as the
third-largest shareholder following the National Pension Service) and GIC
Private Ltd, a Singaporean sovereign wealth fund. The driving force behind the
decision is a $15-billion-takeover bid offered by Nippon Steel to purchase U.S.
Steel Corp, with additional investments of $1.4 billion in March 2024 and $1.3
billion in August. Japan‘s biggest steelmaker is reportedly planning to offload
at least $211 million in assets later in the year to manage its debt ahead of
the planned takeover.
POSCO Holdings owns a 1.7 percent stake in Nippon Steel. While the
former said it has no immediate plans to sell its stake, saying “no specific
decision has been made regarding the sale,” market analysts believe a sale is
much more likely. If Nippon Steel begins to focus on U.S. Steel, the years-long
relationship between the Korean and Japanese steelmakers will become harder to
sustain, according to the analysts.