South Korean steel maker SeAH Steel Corp. will transform into a holding structure starting September 1 after demerger into investment and operational entities.

The company announced Monday that its shareholders last Friday approved the plan to split its structure into SeAH Steel Holding, which will be focusing on investment activities, and SeAH Steel, which will be in charge of steel manufacturing and sales.

"The demerger will enhance effectiveness at a time of expansion at home and abroad,” said an official from the company. The reorganization would improve management transparency and help it better respond to growing trade pressures from the United States, the company said.

Holding establishments have been a popular means for hereditary succession in family-run chaebol entities facing tougher administrative rules and taxes.

The reorganization will enhance independency of two next-generation leaders - Lee Tae-sung, chief executive of its existing holding entity SeAH Holdings, and Lee Joo-sung, vice president of SeAH Steel. Founded in 1960, SeAH Steel is the nation’s fourth largest steel maker by sales following Posco, Hyundai Steel Co. and Dongkuk Steel Mill Co. It runs 12 operations overseas, including in Japan, Vietnam and the United States.

Shares of SeAH Steel rose 0.14 percent to close Monday at 69,600 won.

By Woo Je-yoon and Choi Mira

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