POSCO India Processing Center Private Limited

Page 1 of 10 COMPETITION COMMISSION OF INDIA Combination Registration No.C-2024/12/1225 04th February 2025 Notice under Section 6(2) of the Competition Act, 2002 filed by POSCO-India Processing Center Private Limited. CORAM: Ms. Ravneet Kaur Chairperson Mr. Anil Agrawal Member Ms. Sweta Kakkad Member Mr. Deepak Anurag Member Order under Section 31(1) of the Competition Act, 2002 1. On 24th December 2024, the Competition Commission of India (Commission) received a notice under sub-section (2) of Section 6 of the Competition Act, 2002 (Act) filed by POSCO-India Processing Center Private Limited, Gurgaon (PIPC/ Acquirer) for acquisition of shareholding in POSCO-India Pune Processing Center Private Limited (IPPC/ Target) [hereinafter, Acquirer and Target are collectively referred to as the Parties]. Combination Registration No. C-2024/12/1225 Page 2 of 10 2. The notice has been filed pursuant to a Share Purchase Agreement (SPA) entered into between Acquirer and LX International Corporation (Seller) on 9th December 2024. 3. The proposed transaction involves acquisition of 35% shareholding in the Target by the Acquirer from the Seller (Proposed Combination). It is stated in the notice that the Proposed Combination is notified to the Commission as there is a change of control i.e., from joint control to effectively sole control by POSCO Holdings Inc. (POSCO Holdings), the ultimate parent of the POSCO Group. 4. It is submitted that the Proposed Combination is essentially an intra-group restructuring as POSCO Holdings, the ultimate parent of the POSCO group, holds 65% shareholding in Target and 93.34% shareholding in the Acquirer directly and 1.98% shareholding indirectly through POSCO (Thailand) Co. Ltd. Therefore, both the Acquirer and Target are group entities within the POSCO group. The unrelated Seller will be selling its entire stake of 35% in the Target to the Acquirer. With the Acquirer purchasing the Seller’s entire shareholding, POSCO Holdings (which currently holds more than 50% of shareholding in the Target) will be indirectly increasing its shareholding in the Target through the Acquirer. Post-Transaction, POSCO Holdings will, directly and indirectly through the Acquirer, hold 98.36% shareholding in the Target. 5. In accordance with Regulation 14(2) of the Competition Commission of India (Combinations) Regulations, 2024, vide letter dated 6th January 2025 and 22nd January 2025, certain information(s)/ clarification(s) were sought from the Acquirer and complete response was received on 27th January 2025. 6. The Acquirer is a subsidiary of the POSCO group, a South Korean multinational steel- making company. It does not have any subsidiaries of its own. In India, the Acquirer is primarily involved in the processing and/ or distribution of various finished steel products including, hot rolled steel, cold rolled steel, galvanized steel, specialty steel like electrical steel and other types of steel products including stainless steel, steel wire rods, coils etc. (collectively, value-added products). The Acquirer sources steel Combination Registration No. C-2024/12/1225 Page 3 of 10 products (such as steel coils/ sheets) from overseas and domestically from its related parties including POSCO Maharashtra Steel Private Ltd. (PMH) and subsequently processes these steel products through slitting, shearing and cutting to meet specific customer needs. These finished steel products or value-added products are thereafter sold to customers for use in final products in multiple industries such as automotive, home appliances, electrical industries, solar projects, construction, infrastructure etc. The Acquirer is not active outside India. 7. POSCO Co. Ltd. is a wholly owned subsidiary of POSCO Holdings. It was established with the purpose of production and sales of steel rolled products and plates, upon a vertical spin-off of the steel business of POSCO Holdings in March 2022. POSCO Co. Ltd. currently has two integrated steel mills in South Korea and is engaged in the supply of a wide range of steel products including hot rolled sheets, plates, wire rods, cold rolled sheets, galvanized sheets and stainless steel. POSCO Co. Ltd. does not have any direct activities in India and is present in India only through its subsidiary i.e., POSCO India Pvt. Ltd. which is engaged in investment business. 8. POSCO Holdings is an entity incorporated in South Korea. It is the holding company of the POSCO group. It is not directly engaged in any business activity other than activities through its subsidiaries. 9. Globally, the POSCO group is engaged in six key segments through its various subsidiaries, namely, (i) steel segment which includes production and sale of various steel products including galvanized steel, hot rolled steel, stainless steel, cold rolled steel, etc.; (ii) green infrastructure – trading which primarily consists of global trading activities, natural resource development activities and power generation activities; (iii) green infrastructure – construction which primarily consists of planning, designing and construction of industrial plants, civil engineering projects and commercial and residential buildings, both in Korea and other countries; (iv) green infrastructure – logistics which primarily consists of the information technology, operational technology services and integrated logistics services; (v) green materials and energy which primarily consists of: (a) the manufacture and sale of various energy related and Combination Registration No. C-2024/12/1225 Page 4 of 10 other industrial materials, including anode and cathode materials for rechargeable batteries, and (b) investments made in production projects relating to materials such as lithium; and (vi) other segments which includes other minor segments such as dividend income from investments. 10. In India, POSCO group through its subsidiaries (i.e., the Acquirer and Target and other subsidiaries) is primarily involved in the manufacture and sale of certain finished steel products and processing and/ or distribution of value- added products. Further, POSCO group in India is also engaged in certain other activities including logistics, civil engineering and construction, and marketing through its subsidiaries POSCO-India Steel Distribution Centra Pvt. Ltd. (POSCO ISDC), POSCO Engineering and Construction India Private Limited and POSCO International India Pvt. Ltd., respectively. 11. The Target, also a POSCO group entity, has three subsidiaries in India, namely, POSCO TMC India Pvt. Ltd. (POSCO TMC), POSCO Poggenamp Electrical Steel Ltd. (POSCO Poggenamp) and POSCO ISDC. The Target is primarily active in the processing and/ or distribution of finished steel products including, hot rolled steel, cold rolled steel, galvanized steel, specialty steel like electrical steel and other types of steel products including coils etc. i.e., value-added products. The Target is not directly engaged in the manufacturing of these steel products but is engaged in the processing of steel into different forms through cutting, slitting and further processing of these steel products, based on the specific requirements of various customers. Two subsidiaries of Target i.e., POSCO TMC and POSCO Poggenamp are also engaged in the processing of certain steel products including electrical steel and other steel products including coil, scrap, etc. In addition to the steel business, Target, through one of its subsidiaries i.e., POSCO ISDC, is also engaged in providing logistics services primarily to other POSCO group entities, and to certain third parties. The Target is not active outside India. 12. It is stated in the notice that both the Acquirer and the Target are engaged in the processing and/ or distribution of various value-added finished steel products by way Combination Registration No. C-2024/12/1225 Page 5 of 10 of cutting and slitting steel coils into sheets as per the specific requirements of customers. Both are present in the broader business of processing and distribution of steel, and specifically in the market for processing and/ or distribution of value-added steel products, such as, (i) hot rolled coils, sheets and plates; (ii) cold rolled coils, sheets and plates; (iii) galvanised steel products; and (iv) specialty steels and other steel products. It is stated that the products included in specialty steel products comprise electrical steel and POSCO Magnesium Alloy Coating Product (PosMAC), a specialty steel developed with POSCO’s proprietary technology which is mainly used in the solar renewable energy and automotive sector. Miscellaneous steel products comprise stainless steel, wire rods and scrap. In addition to the business of processing of steel, the Target, through its 100% subsidiary POSCO ISDC, is also present in the business of providing logistics services, primarily to entities within the POSCO Group.