Resolution on merger decision (The Board of Directors)

Notice of Closing of the Register of Shareholders

Conclusion of a contract

Record date for Closing of the Register of Shareholders

Period for Closing of the Register of Shareholders

Period for Receiving Shareholders’ Objection on merger

Resolution on merger approval (The Board of Directors)

Period for Receiving Creditors’ Objection on merger

Date of merger

Issuance Date of new shares (Treasury shares)

Notice of completion of merger

(Approval Date of the Board of Directors)

Registration Date of merger

Method of the

Merger

-   POSCO P&S is merged into POSCO

•  Acquiring/Surviving Company: POSCO

•  Acquired/Target Company: POSCO P&S

-   Upon completion of merger, the name of surviving company is POSCO, and POSCO P&S will be dissolved.

Type of the Merger

Purpose of the

Merger

Major Effects

from the Merger

-   As of this public disclosure date, the largest shareholder of POSCO is National Pension Service, holding 10.82% stake in POSCO. Also, the largest shareholder of POSCO P&S is POSCO, holding 93.95% stake in POSCO P&S (POSCO holds 98.30% stake in POSCO P&S in case related parties are considered).

-   Upon completion of the merger, POSCO will remain as the surviving company.

Also, POSCO will succeed the all rights and obligations of POSCO P&S.

-   The largest shareholder of POSCO will remain the same.

-   POSCO Processing & Service will be dissolved.

-   This merger is expected to bring many benefits, including without limitation, reducing corporate taxes and administration costs and bringing operating synergy with other subsidiaries.

Merger Ratio

Calculation Basis

of Merger Ratio

(1) Merger Unit Price of POSCO Common Share (listed company)

A: Weighted average price of recent 1 month (July 22~August 21, 2018) : KRW 324,954

B: Weighted average price of recent 1 week (August 15~August 21, 2018): KRW 318,432

C: Price of recent date (August 21, 2018): KRW 326,000

Merger Unit Price[(A + B + C) / 3]: KRW 323,129

(2) Merger Unit Price of POSCO P&S Common Share (unlisted company)

A: Intrinsic value [(a x 1 + b x 1.5) ÷ 2.5] : KRW 47,063

a. Value of Asset: KRW 38,419

b. Value of Profitability: KRW 52,826

B: Relative value: N/A

Merger Unit Price: KRW 47,063

Accordingly, the merger ration of POSCO and POSCO P&S is determined as 1 : 0.1456475

External

Evaluation

Category and

Number of Issuing

new shares

for Merger

Common Shares / 115,703 shares

ø   POSCO will distribute its treasury shares to the shareholders of POSCO P&S, and new shares will not be issued.

Other information

for investors

-   Samil PricewaterhouseCoopers had reviewed each company’s merger price and merger ratio of 1 : 0.1456475 (POSCO : POSCO P&S) and agrees that they are appropriate.

-   In accordance with Article 527-3 of KCA, this small-scale merger will be approved by the Board of Directors of POSCO and will not be voted at the ordinary general meeting of shareholders.

-   The timeline of merger may be adjusted.

-   In accordance with Article 527-3 of KCA, in the case of small-scale merger, appraisal rights of stockholders opposing merger shall not apply.

-   In accordance with Article 527-3 of KCA, the merger shall not be effected if shareholders who own no less than 20 percent of the total number of issued and outstanding shares of the company surviving a merger give written notice to the company of their dissent to the merger within two weeks of the receipt of the public notice.

-   The merger contract between POSCO and POSCO P&S shall not come into effect if any reason set forth below occurs prior to the date of merger.

1)  Written agreement between the parties is entered into before the date of merger

2)  Either party’s board of director does not approve the merger.

3)  After execution of this merger contract but prior to the date of merger, if any material adverse effect occurs or is reasonably expected to occur in financial condition, business performance, other business situation or prospect of either party which may result in failure to achieve the purpose of this merger.

4)  If any party materially breaches the merger contract

Consolidated Financial status (as of December 31, 2017)

Total Asset

Total Liabilities

Total Equity

Resolution on merger decision(The Board of Directors)

Notice of Closing of the Register of Shareholders

Conclusion of a contract

Record date for Closing of the Register of Shareholders

Period for Closing of the Register of Shareholders

Period for Receiving Shareholders’ Objection on merger

Resolution on merger approval (The Board of Directors)

Period for Receiving Creditors’ Objection on merger

Date of merger

Issuance Date of new shares (Treasury shares)

Notice of completion of merger

(Approval Date of the Board of Directors)

Registration Date of merger

The timeline may be adjusted.

If you wish to object to above merger, please contact Jayne Whalen at Computershare at +1-201-222-4412 to request an objection form. A completed objection form needs to be faxed to Citibank, N.A., depositary of POSOC, prior to 4:00 p.m. (New York time) on Sept. 18th, 2018 at +1-201-222-4593 (attn.: Jayne Whalen).

/s/ Yoon, Duk-Il