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It seems to be decided by the board of directors later this month … Following the tradition of separating the family after the inheritance of the firstborn
Major divisions like LG Electronics and Chemicals remain … Possibility of further separation like LG MMA
It is known that Koo Bon-jun, advisor to LG Group, will part ways with LG Group with LG International, LG Hausys and Pantos.
Koo is the third son of the late LG Honorary Chairman Ja-kyung Koo and the younger brother of LG Chairman Koo Bon-moo.
As current LG chairman Kwang-mo Koo took over as group chairman in 2018, the possibility of the former advisor’s split has been constantly raised both within and outside LG.
According to the business community on the 16th, it is reported that LG will hold a board of directors later this month to decide on said separation plan.
The former adviser owns a 7.72% stake in LG Corp., an LG holding company.
The value of this stake is approximately KRW 1 trillion, and the former advisor is expected to take over the shares of LG International and LG Hausys using this stake.
Previously, LG International sold a stake in LG Twin Tower in Yeouido, the LG Group headquarters building, to LG Corp. last year and moved it to the LG Gwanghwamun building.
Additionally, the owner’s family, including Chairman Kwang-mo Koo, has been working in a separate division by selling a 19.9% stake in Pantos, a logistics subsidiary of LG International.
The former advisor’s top-down division of divisions is interpreted as being intended to minimize the impact on the governance structure while fully preserving the flagship businesses, electronics and chemistry of the current LG Group.
Immediately after the inauguration of President Koo Kwang-mo in 2018, the possibility of separating electronic divisions such as LG Innotek and LG Display was raised.
Currently, LG International, a holding company, is the largest shareholder with a 25% stake in LG International and a 34% stake in LG Hausys, and LG International owns a 51% stake in Pantos, which is responsible for the group logistics abroad.
With the separation of the subsidiary, the ratio of internal transactions between large clients such as LG Electronics and Chemicals and Pantos has reached 60%, which will naturally solve the problem of depriving the subsidiary, which has been the objective of the Commerce Commission. Fair.
LG Hausys is a building materials and automotive materials company created by splitting the industrial materials business division of LG Chem in 2009.
The market capitalization of LG International, which will part with the subsidiary this time, is KRW 715.1 billion and LG Hausys is not large at KRW 5856 billion.
However, since the scale of the affiliated company is small, there is also the possibility of further separation between Silicon Works, a semiconductor design company, and LG MMA, a manufacturer of chemical materials, both inside and outside of LG.
It seems that the decision that LG Group decided to separate its affiliates this time was based on the judgment that the time has come as President Koo Kwang-mo has been in office for three years.
The former advisor division follows the LG Group tradition that has been passed down from its predecessor.
The LG Group has continued the tradition of “independent sibling management” in which the eldest son takes over the management of the group when the president of Seondae dies and the younger siblings separate.
The business community expects that there will be no more division of LG Group after this division.
/ yunhap news
