POSCO, South Korea’s No. 1 steelmaker, said Thursday it has inked a deal to spin off its specialty steel affiliate as part of a greater effort to reorganize the entire industry. The memorandum of understanding signed with SeAH Group, a specialty steel, auto parts and welding materials conglomerate, outlines the acquisition of POSCO Specialty Steel by SeAH Besteel Corp.

POSCO said conditions of the deal and the selling price will be worked out at a later date, with both sides to discuss ways to expand cooperation as part of the M&A. It said a working group will be formed soon to determine all the details.

“The move is being taken due to the chronic over-capacity in the specialty steel sector and inroads by imports that warranted some sort of industry-wide restructuring,” the steelmaker said. (Yonhap)