POSCO beats Lotte to join S.Korea’s top 5 conglomerates

Steel giant POSCO has joined the ranks of South Korea’s top five conglomerates for the first time, supported by strong earnings from its rechargeable battery materials business and a transformation into a holding company structure.

It took the fifth position after Samsung, SK, Hyundai Motor and LG among the country's top 82 conglomerates each with 5 trillion won ($3.7 billion) or more in assets, according to the Fair Trade Commission (FTC) on Tuesday.

POSCO replaced the food-to-leisure-focused Lotte Group, which had held its No. 5 position for 13 years straight since 2010.

The FTC started compiling the assets-based list in 1987.

Six new business groups on the list include LX Group, split off from LG Group in 2022, and EcoPro, an electric vehicle battery materials supplier.

They will be under stricter monitoring by the antitrust body from next month regarding intra-group transactions, shareholdings by their founding families, as well as unfair business practices between subsidiaries.

Also, the groups with assets of 10 trillion won or above are not allowed to increase cross-shareholdings, nor make new circular investments within the group.

POSCO Group’s assets swelled to 132.07 trillion won as of end-2022 from 96.3 trillion won a year earlier. It has undergone a transformation into a holding company, which an FTC official said boosted its asset value.

By comparison, Lotte saw its assets rise by about 8 trillion won, following the $2 billion purchase of a leading battery materials maker Iljin Materials Co.

Samsung remained on top of the list, with assets of 486.4 trillion won as of end-2022.

As corporate values continued to rise, the FTC will change the yardstick of designating top conglomerates from the absolute value of assets to business groups with assets equivalent to 0.5% of the country’s gross domestic product from next year.

Among the newcomers in the 5 trillion won club is EcoPro, ranked 62th.

Its assets ballooned 60% to 6.9 trillion won as of the end of last year, following a series of new share issues for capital expenditures in line with the EV market boom.

The group will be required to make regulatory filings and its owner-turned-head Lee Dong-chae will be banned from tapping the group’s money for private purposes from next month.

Dunamu Inc., the operator of Korea’s largest cryptocurrency exchange Upbit, slid to 61th from 44th, hit by deposit outflows and shrinking market liquidity.

Last year, it became the country’s first conglomerate in the digital asset industry. Its total assets dwindled to 7.4 trillion won as of the end of last year, versus the previous year's 10.8 trillion won.

Meanwhile, Coupang Corp., an ecommerce platform, joined the 10 trillion won club. But its Korean American founder-cum-CEO Bom Kim is excluded from the owner-turned-head list, which only includes entrepreneurs of South Korean citizenship.

Write to Han-Shin Park and Sul-Gi Lee at phs@hankyung.com

Yeonhee Kim edited this article.