On September 24, 2024, Nippon Steel announced that it will sell 2,894,712 shares of POSCO Holdings Inc. in order to improve asset efficiency, while maintaining its strategic alliance with the company.
In its official announcement, Nippon Steel stated that, as part of efforts to enhance asset efficiency, it plans to sell a total of approximately 2.9 million shares that it currently holds in POSCO Holdings, a leading steel producer in South Korea.
The share sale is intended to improve asset management efficiency through restructuring and consolidation. Specific terms of the transaction will be determined based on assessments of market conditions and other relevant factors.
Nippon Steel noted that the impact of this share sale on the company’s profits for fiscal year 2024/2025 (ending March 2025) is currently unclear.
Since 2000, the two companies have developed a relationship involving cross-shareholding and technology cooperation under a strategic alliance agreement. Nippon Steel emphasized that this partnership will continue even after the completion of the share sale.
According to a report by GMK Center, Nippon Steel’s revenue for fiscal year 2023/2024 increased to 8.87 trillion yen (USD 56.9 billion), representing an 11.2% year-on-year increase. However, the company’s operating income and net profit declined by 5.1% and 20.8% year-on-year, respectively, to 869.7 billion yen and 549.4 billion yen on a consolidated basis.
The company expects consolidated steel production to reach 40.5 million tonnes in fiscal year 2024/2025, while non-consolidated shipments are projected at 32 million tonnes. In fiscal year 2023/2024, non-consolidated steel shipments increased by 1.8% year-on-year to 32.03 million tonnes, of which 44% of product value was exported, up from 43% in the previous fiscal year.
The companies expect to complete the transaction by the end of December, subject to approval from relevant regulatory authorities.
Official announcement: https://www.nipponsteel.com/common/secure/en/news/20240924_100.pdf
