South Korea's Posco Group is laying out an ambitious transformation plan, committing 167 trillion won (roughly $125 billion) through 2028 to build a new business beyond its traditional steelmaking roots. The centerpiece: lithium, battery materials, and energy projects that the conglomerate hopes will become a genuine second engine of growth.
Chairman Chang In-hwa outlined the strategy in a report by Pulse News on Friday, signaling that Posco Holdings sees this as more than a side venture. The group is targeting 187 trillion won in revenue and 13.1 trillion won in operating profit by 2035, figures that underscore the scale of the ambition. To get there, Posco is backing lithium projects including its operations in Argentina, a country that has become a hotspot for the metal used in electric vehicle batteries.
Funding the Pivot: Stake Sales and the 50% Threshold
A key piece of the funding puzzle involves trimming the parent company's ownership in its listed subsidiaries. Posco Holdings currently owns 72.98% of Posco International, 65.47% of Posco DX, and 58.18% of Posco Future M. The plan is to reduce those stakes to around 50%, which the group says could raise about 3.82 trillion won to finance what it calls "key resource projects."
For investors, this is more than a simple portfolio adjustment. Selling down stakes can bring in much-needed cash for the lithium and battery push, but it also changes the control dynamics between the parent and its units. Moving closer to 50% ownership means Posco Holdings would still have significant influence, but it could also open the door for more independent decision-making at the subsidiary level.
In the short term, the prospect of a large block of shares hitting the market can create what traders call an "overhang" — the fear that a big seller is coming, which can pressure the stock price of the subsidiary until the market absorbs the extra supply. That's why shares of Posco International, Posco DX, and Posco Future M could react differently to the same announcement, depending on how investors interpret the timing and size of any placements.
What It Means for Investors
For everyday investors, this story touches on several themes that matter for portfolio thinking. First, the pivot beyond steel reflects a broader trend in heavy industry: companies that built their fortunes on traditional materials are racing to reposition themselves for the green energy transition. Posco's move into lithium and battery materials puts it in direct competition with other players in the battery supply chain, including Chinese giant CATL, which recently invested in CarbonScape to turn forestry waste into battery graphite. It also echoes moves by Australian miners eyeing higher lithium prices to restart idled mines, as noted by ANZ.
Second, the stake sale plan highlights a recurring tension in conglomerate structures. When a parent company reduces its ownership in a subsidiary, minority investors may start pricing in a higher chance of future corporate actions — such as mergers, spin-offs, or different dividend policies. That can lead to valuation shifts that are hard to predict until the details emerge.
Third, the broader market backdrop matters. Steel demand is closely tied to economic cycles, and recent news like Japan's Nikkei flatlining as chip stocks cool and Tokyo targets steel imports shows how global trade dynamics can affect the sector. Posco's diversification into lithium and energy is partly a hedge against those cycles, but it also exposes the group to the volatility of commodity prices and the pace of EV adoption.
Long-Term Goals and the Road Ahead
The 2035 targets — 187 trillion won in revenue and 13.1 trillion won in operating profit — are ambitious, but they are also long-range. Investors will be watching for concrete milestones: how quickly Posco can scale its lithium operations in Argentina, whether it can secure offtake agreements with battery makers, and how the stake sales are executed without disrupting the market.
For now, the market's reaction will likely hinge on the details of the stake reduction plan. If Posco can raise the 3.82 trillion won without causing a sharp sell-off in its subsidiaries, the funding path looks clearer. If not, the overhang could weigh on those stocks until the market adjusts.
Ultimately, Posco's pivot is a bet that the future of industrial growth lies in batteries and energy, not just steel. For investors, the key question is whether the conglomerate can execute that vision while managing the delicate balance of control, cash, and market perception.
