Baoshan Iron & Steel Co. Ltd.: Crafting a Three-Way Cross-Border Cross-Shareholding Alliance

Case Analysis

On 2 August 2000 made Korea-based Pohang Iron & Steel Co. Ltd. (POSCO) and Japan-based Nippon Steel Corp. (NSC), a cross-border, cross-equity alliance. At a joint press conference, the two companies said their alliance was again not confined to their farms alone and the approaches would be welcomed by others. The invitation had attracted the interest of the largest steel manufacturers in China, Baoshan Iron & Steel Co. Ltd. (Baosteel). In January 2001, Baosteel signed a Memorandum of Understanding w … Read more »

On 2 August 2000 made Korea-based Pohang Iron & Steel Co. Ltd. (POSCO) and Japan-based Nippon Steel Corp. (NSC), a cross-border, cross-equity alliance. At a joint press conference, the two companies said their alliance was again not confined to their farms alone and the approaches would be welcomed by others. The invitation had attracted the interest of the largest steel manufacturers in China, Baoshan Iron & Steel Co. Ltd. (Baosteel). In January 2001, Baosteel signed a Memorandum of Understanding with POSCO to create a cross-shareholding in each other’s shares. The company has also planned to invite NPC to acquire a stake in the group. When the Sino-Japanese alliance succeeded in the three steel giants would form a three-way cross-border, cross-equity alliance. Such a bold move would help Baosteel to gain the upper hand in competition with European and American steel companies looking forward to the Asian market.
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from
Zhigang Tao,
Mary Ho
Source: University of Hong Kong
19 pages.
Release Date: 24, January 2002. Prod #: HKU188-PDF-ENG
Baoshan Iron & Steel Co. Ltd.: Crafting a three-way cross-border, cross shareholding alliance HBR case solution