POSCO buys Daewoo International for $2.8 billion

POSCO on Monday signed a deal to acquire Daewoo International Corp. as the world’s fourth largest steelmaker seeks to diversify its businesses and secure stable sources for raw materials.

The contract was signed by POSCO and Korea Asset Management Corp., representative of Daewoo International stakeholders, and calls for the steelmaker to make the payment by the end of September.

Under the contract, POSCO will acquire about 68 percent of Daewoo International or 68.68 million shares, for 3.37 trillion won ($2.8 billion), 87.8 billion won less than the steelmaker’s initial offer of 3.46 trillion won.

The final amount equates to roughly 49,100 won per share. Daewoo International closed at 32,300 won on Monday, up 0.94 percent from Friday. The highest closing price of Daewoo International shares seen this year is 38,650 won on Jan. 21.

At the end of last year, Daewoo International’s paid in capital stood at 489 billion won. For last year, the company’s revenues came in at 11.1 trillion won while its operating and net profits were recorded respectively at 171 billion won and 125 billion won. 

KT unveils first local tablet PC

KT Corp. unveiled the first tablet PC running on the Android operating system in Korea on Monday.

KT presented the 7-inch Identity Tab made by a mid-sized hardware manufacturer Enspert. It will be officially launched Sept. 10.

The announcement comes shortly ahead of Samsung Electronics’ release of its tablet PC called Galaxy Tab, which is slated to take place at the global electronics display event in Germany this week. KT’s rival SK Telecom plans to release the Samsung product in September. 

Samsung competitor LG Electronics is getting ready to launch its own model in a joint effort with LG Uplus and global giant Apple Inc. is also planning to release its already-popular iPad in the local market sometime this year.

"(The Identity Tab) is a product that combines the strengths of the PC, laptop, e-book device, smartphone and gaming machines,” said Enspert CEO Lee Chang-seok at a news conference. “It specializes in multimedia contents.”

LG, SNU start annual fellowship program for foreign journalists

The LG Sangnam Press Foundation and the Seoul National University began a three-week educational program for foreign journalists on Monday

The foundation and the Institute of Communication Research of the SNU have jointly conducted the program since 1997. A total of 128 journalists from 15 nations took part.

This year’s program is joined by seven journalists from Group of 20 countries including Brazil, China, India, Mexico and Spain. 

Korea wary of China-Taiwan trade

Experts are raising voices for businesses and policymakers to forge closer tieswith China and Taiwan to cope with an emerging economic integration between the two countries.

The two Cold War rivals signed a historic trade pact in late July to cut tariffs and open their markets wider to each other, paving the way for an a pan-Chineseeconomic community. 

The Economic Cooperation Framework Agreement is expected to affect Korean exporters, especially in high-tech industries, which are compete closely with Taiwanese firms in the global market. 

“There will be synergies of combining China’s capital and Taiwan’s technology. Taiwanese goods will become much more competitive especially in China,” said Kwon Hyuk-jae, a China expert at the Samsung Economic Research Institute.

The trade pact will allow Taiwanese companies to attract wider pool of investors and consumers from the mainland.

“It’s difficult to quantify the pact’s implications on Korea but the deal definitely disadvantages Korean firms in the long run,” he added.

The deal calls on China to lift tariffs on 539 Taiwanese products and open 11 service sectors to Taiwanese companies, such as banking, accounting, aircraft maintenance, insurance and hospitals. 

In return, Taiwan is giving up tariffs on 267 Chinese exports worth $2.85 billion.

The change is expected to increase Taiwanese exports by $13.8 billion over the next two years.

For China, it is a major achievement in its efforts to form a pan-Chinese economic bloc with a 1.4 billion population, encompassing China, Taiwan, Hong Kong and Macau whose population.

Korean LCD, petrochemical, and white goods makers are expected to be hit hardest in the face of competition with Taiwanese counterparts.

Of 100 Chinese buyers surveyed, 39 picked Korean electronics would be the most affected, and 22 picked agricultural goods, the Korea Trade Investment Promotion Agency said. 

Korea and Taiwan each make up 10.2 percent and 8.6 percent of China’s imports. A total of 14 products overlap between the two countries in its list 20 major of exports to China. For Korea, the 14 items make up 60 percent of Korea’s total export to China. 

“Exporters should more actively pursue strategic alliances with Taiwanese companies like the way Japanese did to penetrate the Chinese market,” Kwon said.

Experts are calling on the government to speed up negotiations for a bilateral free trade agreement with China and push harder for East Asian trade liberalization. 

“Korea may lose out by Taiwan in the Chinese market. The situation makes casefor Korea to push harder for the Korea-China-Japan FTA,” Park Sang-soo, business professor at the Chungbuk University said.

Leaders from Korea and China in June agreed to start preliminary consultations by September before launching full-fledged negotiations. Private experts from the two countries have been conducting feasibility studies for years. Koreans worry that their agricultural industry would be seriously damaged by competition with cheaper Chinese goods. 

“The government should consider gradual settlement of the pact rather than packaging the FTA at once, by discussing areas with less disputes first,” Kwon added.

The ECFA is also expected to spur interest among other countries in the region in pushing free trade agreements with Taiwan, a former Japanese policymaker forecasted through the Nihon Keizai Shimbun Thursday.

Japan Economic Foundation chairman Noboru Hatakeyama, a former official of Japan’s Ministry of Economy, said Taiwan’s signing of the pact will “help strengthen economic relations and improve bilateral ties between Taiwan and China,” which would lift Taiwan’s status in the region.

Policymakers from the Association of Southeast Asian Nations have recently reaffirmed their push to achieve a single market and production base in 2015. 

A meeting of ASEAN economic ministers on August 24-25 reiterated their commitment to promote trade facilitation measures for free flow of goods in the region. The group is to push FTAs between ASEAN and major Asia-Pacific markets including China, Korea, Australia, New Zealand and India. 

Singapore tightens loan limits

Singapore added measures to rein in speculative property purchases after previous attempts to cool the real estate market had limited effect. 

Singapore will levy a seller’s stamp duty on all residential units and land sold within three years from the date of purchase, compared with one year now, the Ministry of National Development said in an e-mailed statement Sunday. Buyers who hold more than one mortgage can only borrow up to 70 percent of a purchase and must pay 10 percent of the property value in cash, up from 5 percent before, the government said. 

The new steps are among a range of measures to address Singaporeans’ concerns that an influx of foreign workers and immigrants will create more competition for housing, education and jobs. Hong Kong said this month it will tighten mortgage lending rules and increase the supply of land in a campaign to suppress gains in home prices. 

“The property market is currently very buoyant,” the government said today. “The government’s objective is to ensure a stable and sustainable property market where prices move in line with economic fundamentals.” 

S. Korea, Peru strike free trade deal

South Korea struck a free trade deal with Peru on Monday, the latest trade pact that could pave the way for Asia's fourth-largest economy to tap deeper into the South American region, Seoul officials said, Yonhap News reported.

Peru marks the second South American country with which South Korea has sealed such a trade pact. 

Kim Jong-il wants to resume six-party talks: report

North Korean leader Kim Jong-il wants to resume the six-nation nuclear talks at an early date through close cooperation with China, Xinhua News reported Monday.

Kim expressed his wish to ease tension on the Korean Peninsula during summit talks with Chinese President Hu Jintao last Friday in the northeastern Chinese city of Changchun, according to the Chinese state news agency.