This article was displayed on the ChosunBiz MoneyMove (MM) site at 4:09 p.m. on May 28, 2026.
SeAH Special Steel will acquire all of POSCO's equity in their China joint venture (JV) and shift the local business to a sole-ownership structure. Amid slower growth in China's steel and auto markets, the move is seen as strengthening control over its local production base and establishing an independent operating system.
According to the investment banking (IB) industry on the 28th, SeAH Special Steel recently acquired the 25% equity in the PosSeAH Wire Tianjin subsidiary held by POSCO China. The transaction was carried out under a shareholders' agreement signed when the joint venture was established in 2013. As a result, SeAH Special Steel increased its ownership from 75% to 100%.
The call option exercise price is said to have been determined by a pre-agreed formula at the time of the contract. The structure prices the 25% equity based on PosSeAH Wire's intrinsic value at the time the option is exercised. However, the industry believes the actual valuation was likely not high, considering PosSeAH Wire's recent performance and financial condition. The entity is known to be in a state of complete capital erosion as of the first quarter of this year.
PosSeAH Wire produces cold heading quality (CHQ) wire and CD bar and supplies them to local auto and machinery parts companies in China. SeAH Special Steel has been expanding its overseas production bases in Nantong and Tianjin in China, as well as in Thailand and Mexico. Among them, the Tianjin subsidiary is viewed as a strategic base targeting the North China auto industry belt.
The industry sees the transaction as the result of intersecting strategic shifts by both sides. China's special steel market has seen profitability fall significantly from the past due to capacity additions by local players and intensifying price competition.
SeAH Special Steel is interpreted as prioritizing long-term control over production bases and stronger customer responsiveness over short-term profitability. Because the special steel wire business requires customized quality response and delivery control, a sole decision-making structure is assessed to improve operating efficiency. It also appears to have considered that dealing with local automakers and parts suppliers in China could speed up decision-making and drive production and operations efficiency.
The industry views the transaction as largely aimed at streamlining local operations and strengthening control. While the growth potential of the China market itself has slowed compared with the past, the strategic necessity of the Tianjin production base remains valid in terms of local customer response and the global supply chain.