POSCO shipbuilding acquisition?

As China becomes a net steel exporter, and at the same time South Korean shipbuilding orders boom, some observers suggest that the time is ripe for takeovers, such as maybe that by Posco of Daewoo Shipbuilding.

Such a move would guarantee the steelmaker downstream sales in the years to come, preventing regional steelmaking from being completely crowded out by Chinese supply.

For original news report, see Business Week.

Whilst the acquisition logic seems sound, perhaps a key question - at a time of rising prices in the shipping sector - is the price to be paid for the downstream acquisition. Targets don't come cheap in sectors facing very high growth.

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